Thinking of buying a car on finance?
Data from the Finance & Leasing Association (FLA) reveals that the new car finance market saw a 10% year on year increase in value and 5% by volume in June. The used car finance market also reported new business up 9% by value and 7% by volume in June.
With finance playing such a vital role for new car buyers, Equifax is highlighting the role of credit information in the process.
“With a high proportion of new car registrations backed by some sort of finance package, according to the FLA, it’s important for budding car buyers to understand the role their credit information can play in their process”, explained Lisa Hardstaff, of Equifax.
“Car finance companies will assess a range of information about an individual, as part of a new car loan application. In addition to the information provided on an application form, lenders perform a credit check to get an overall picture of an individual’s credit history. They will want to see that the applicant stays up-to-date on repayments on past and current agreements, as well as assessing the level of financial commitments they already have.”
Lisa Hardstaff continued: “We would suggest, therefore, that the first step for anyone planning to make the most of the low interest rates and competitive manufacturer deals on new car finance, is to obtain a copy of their credit report. This way, they can see the different types of information a lender will use as part of the application process. It is always a good idea to know in advance what information is held on your credit report, so if there are any actions you can take to help improve your credit score you have given yourself time for it to show.
“For example, consumers should always make sure they are on the electoral roll, as this allows lenders to verify their identity on an application. If they are not on the electoral roll it can take up to three months for it to appear on their credit report, depending on when they sign up and when their local council updates the credit reference agencies.”
“Looking at your credit report three to six months in advance can help avoid any delays in the loan being approved, as well as helping to ensure that they gain access to the best credit deals for their financial situation. Our credit report check list can help car buyers avoid disappointment, concluded Ms Hardstaff.”