Car finance – what do they check?

‘Credit rating’; two small words that can create dread in people looking to secure a loan. Considered to be a necessary evil, they are relied on by banks as a way of judging a person’s eligibility for a loan. However, they’re notoriously intrusive, inflexible and can often be misleading when secondary factors are considered.

So, if you’re considering how to fund your new car purchase, there might be an easier way through dealership car finance. Here’s what you need to know:

How banks decide whether to approve a loan

What is a credit score?

A credit score is a three-digit number that can affect your ability to secure a loan or other credit arrangement, as well as what interest rate you’re charged. Calculated from the broad range of factors that comprise your credit report, they’re often used as a hard-and-fast means of determining your credit-worthiness, regardless of any other considerations.

How is a credit score worked out?

Banks rely on one of just three approved credit agencies: Experian, Equifax or CallCredit. You’re likely to have a different score with each, meaning an error by just one agency could prevent you from securing a loan.

Credit reference agencies keep the following information:

  • The Electoral Roll
  • Public records (including court judgments, bankruptcies and Debt relief orders)
  • Account information
  • Home repossessions
  • Financial associations
  • Previous searches
  • Linked addresses

While the score will only take an objective view of the figures provided, many of the criteria can be altered by something else (see below). This often has no bearing on your actual ability to pay back a loan, but may prevent you from securing one in the first place, unless addressed with the bank.

Any of the following scenarios could affect your credit rating:

Bankruptcy
Divorce proceedings
Minor overdraft over-spend
Negative property equity
Early credit card repayments
Fraud (against you)
Not registering to vote
Credit card ATM withdrawals
No fixed address
Payment default due to medical emergency

This information is typically held on file for six years (unless extended through the courts), at which time you can legally ask for it to be removed. But, if you don’t have the right credit score, and don’t want to involve a guarantor, then there’s little chance of securing funding.

Perrys does things differently – why dealership car finance could work for you

Credit score

Like all lenders, we’ll need to check your credit score before agreeing a car finance package with you – but we won’t be invasive. We just need to know that we’ve put the right car with the right person, at a rate they can realistically pay back.

What makes us different is that we work with a broad range of lenders, and are able to find packages suited to people with almost any credit score, without needing to dig down into the details. In fact, Perrys approves a massive nine out of ten applications.

We’ve made our service as flexible as possible. So, if you’ve had problems getting car finance because you’re currently out of work, have been in the same job for a long time, are self-employed or have been refused funding in the past, then we can help you get back on track.

Whereas banks work to set criteria and need you to tick certain boxes before a loan is approved, we won’t make you jump through hoops. We recognise the person behind the credit score, that you don’t want your whole life analysed, so we take a consultative approach to resolving any financial concerns.

Finance options

Not only does Perrys offer personal loan arrangements, there’s three other car financing options to make sure that we find an option that’s perfectly suited to you. We offer:

  • PCP Finance
  • Lease Purchase
  • Hire Purchase
  • Personal Loans

We also have financial options for the ongoing upkeep of your car. These include our Easy Drive Service Plan, which helps you spread the cost of servicing your car through regular monthly payments.

Better rates

We keep an eye on the best rates that the banks can offer. As a long-standing and trusted national retailer, we can get leading rates from some of the biggest name lenders, including Santander, Barclays and Hitachi. We pass these savings onto our customers, without needing to be so stringent with our checks.

There’s also deposit contributions for specific models, which means that either the manufacturer or Perrys will make a contribution towards the deposit on your new car in order to lower your remaining payments.

FCA approved

All sounds too good to be true? Well, it gets better: Perrys’ financial model is fully approved and regulated by the Financial Conduct Authority (FCA), the national regulatory body that ensures customers don’t get scammed or tied to unfair contracts.

Drive away, same day

Because our process is so un-intrusive and can all be handled on-site, you can sign up to a Perrys finance agreement in minutes and drive off the lot in your new car on the same day.

If you want to find out what a car finance deal from Perrys might mean for you, contact the experts at your local dealership today.