If you’re looking for a no credit check loan, chances are you have a bad credit history. Perhaps you’ve recently been insolvent, or had a CCJ issued against you. Whatever the reason, if you have a low credit score, it can be more difficult to get vehicle finance.
Responsible lenders will run a credit check, which will show any negative marks on your credit file. But this doesn’t mean there aren’t vehicle finance options available – many loan providers specialise in finance for bad credit.
What is a Credit Check?
You’ve probably heard of the term ‘credit check’, but what does it really mean? First of all, there are two different types of credit check – a soft and a hard check. With a soft credit check, as the search is less deep, it won’t be reported on your credit file. Your credit score therefore won’t be impacted.
When it comes to a hard, or full, credit check, this will look at all the information on your credit report, and will be recorded there too. The lender will be able to see your credit history from the last six years, which will include loans, credit cards, mortgages, as well as overdrafts. Things like your mobile phone bill and monthly utilities are also reported on your credit file, along with CCJs, insolvency and bankruptcy.
Your credit score is calculated using the details on your credit report, such as late or missed payments. But as your credit file is being regularly updated, your score can change too. If you start to pay off credit commitments, or catch up with your payments, you can build up your credit rating. What this means for a vehicle finance application is higher chances of approval and potentially better interest rates.
Can I Get a No Credit Check Vehicle Loan?
When you apply with Vehicle Finance Today, we’ll only undertake soft credit checks. This therefore won’t affect your credit score. The reason we run these checks is to ensure that any finance deal we present to you is affordable and will meet your needs. A soft credit check will also help us to match you with a suitable vehicle finance provider.
It is important to note that once you’re put in touch with a lender, they may choose to perform a full credit check, in order to make sure they’re lending responsibly. This search would be recorded on your credit report, so it can be helpful to go through a broker like Vehicle Finance Today first to see whether you’re likely to be accepted. Rather than applying with lots of lenders individually, and having multiple hard credit checks on your credit file, you’ll be paired with a lender who is likely to approve your application.
How Can I Find My Credit Score?
Before applying for any type of credit, vehicle finance included, it’s a good idea to check your credit rating first. That way, you can see if there is anything you can do to boost your score before applying, and potentially be offered better interest rates.
You can check your credit score for free via sites like Credit Karma and Experian. These websites also offer helpful advice on improving your credit rating, such as registering on the electoral roll. This will ensure that lenders know that your details are up to date, such as your current address, and will give them assurance that your credit information is up to date too.
How Can I Improve My Credit Rating?
There are a number of ways in which you can easily increase your credit score. As mentioned, you can make sure you’re registered on the electoral roll, and you may also want to ensure that all the details on your credit file are correct. You can request to see a copy of your credit report from any of the UK’s three main credit reference agencies – Experian, TransUnion and Equifax.
Other ways to boost your credit score include paying off old loans and credit cards, to keep your credit utilisation low. If you’ve taken out a lot of credit, lenders may be hesitant to lend you more money. Paying back on time where possible will furthermore help show that you’re responsible with your money, and should improve your credit rating.
Another issue some people have when it comes to their credit score is not having much of a credit footprint. If you’ve not borrowed much money in the past, you’ll probably have a thin credit file, and lenders won’t be able to see how you manage your finances.
Vehicle Finance – Secured Loans
When people look for no credit check loans, it’s generally because they’re worried about their eligibility. If you have a bad credit score, it can be challenging to access credit. But because vehicle finance is a type of secured loan, it could be more accessible than you think.
As the name implies, a secured loan is secured against the value of an asset – in the case of vehicle finance, this would be the vehicle. A mortgage is also a type of secured loan, where the money is secured against your home. Because there is less risk for the lender with these types of loans – the lender has the option of repossessing your assets if you’re unable to make repayments and keep to the agreement – they are much more accessible. This does obviously mean that there is risk for the borrower though.
To ensure that you are able to keep up with repayments, it’s essential that you consider your budget beforehand. You should look at your monthly household income and expenditure, and work out how much you can afford to pay towards a vehicle loan. Then you can use a vehicle finance calculator to find out the amount you can borrow and what the instalments would look like.
No Credit Check Vehicle Finance
There isn’t really any such thing as no credit check vehicle finance, as lenders need to make sure you can afford the repayments without putting yourself in any difficulty. But your credit rating won’t be the only thing they look at when making a loan decision. Vehicle finance providers will also consider your employment history, as well as your monthly budget.
And because it’s a secured loan, your credit score may not be as much of a factor. Secured loans are typically easier to access than unsecured loans. Simply complete an application with us today, and we’ll do our best to put you in touch with a suitable lender!
Looking for Vehicle Finance Options?
Applying for finance through us should only take a few minutes, and won’t impact your credit score. So what are you waiting for?
Get in Touch
Want to discuss your options, or learn more about the application process? Our friendly team are ready to help!