Your Credit Profile Archives

Car Loan APR Explained

Annual Percentage Rate (APR) is one of the most important factors to consider when calculating the total cost of your car loan. Whether you’re shopping for a peppy Volkswagen Golf, an eco-friendly Mini Electric or a luxurious Audi A1, understanding the intricacies of car loan APR is critical when it comes to making smart and informed financial decisions.

In this comprehensive guide, we’ll take a deep dive into APR, explain how it affects your car loan repayments, and provide handy tips on how to unlock the best deals.

Understanding car loan APR

APR stands for Annual Percentage Rate and reflects the total borrowing costs associated with the loan. It includes the interest rate you’ll pay on cash borrowed, as well as additional fees and charges imposed by the lender. The goal is to provide borrowers with a clear idea of the total cost of the loan, including fees. This transparency makes car loan APR one of the most important metrics to consider when crunching your numbers and calculating how much to borrow.

Is APR the same as interest rate?

While car loan APR does factor in interest charged on the cash amount borrowed, it also includes other fees and charges associated with the loan. This makes it a different and more comprehensive metric than a traditional cash interest rate.

Why is APR important?

Car loan APR is one of the best ways to compare loan offers quickly, easily and accurately from different lenders. As mentioned above, APR not only factors in the cash interest rate but includes additional fees and charges. It offers borrowers a glance at the total cost of the loan, expressed using an easy-to-interpret percentage rate. A low APR means you’ll pay less in interest and additional fees over the lifetime of the loan. A high APR means you’ll pay more.

What is a typical APR rate?

In the UK, a typical car loan APR rate offered by a reputable lender should sit at around 10.9% for an applicant with excellent credit. It’s important to understand that most reputable brokers and lenders use representative APR as an example. The actual percentage will vary depending on the applicant. We’ll cover representative APR in more detail below.

Fixed vs variable APR

Most auto loans in the UK come with fixed APR. This means the APR remains constant for the lifetime of the loan and monthly payments stay the same. For borrowers, this provides stability and makes it easy to budget and plan ahead. Car loans with variable APR are less common and can be difficult to manage.

Factors that can influence car loan APR

APR can vary significantly depending on the applicant. Here are a few factors that can influence what APR you’re eligible for:

Personal credit score

Your personal credit score can have a big impact on what car loan APR you are offered. Lenders use your score to assess your credibility as a borrower and calculate risk. Borrowers with high credit scores are generally rewarded with lower APR, and vice versa.

Preferred loan term

The total length of your car loan can affect your APR. Lenders typically offer lower APR for shorter loan terms. Longer terms can result in higher overall APR, though monthly payments are lower which appeals to many borrowers.

Loan amount

The total amount borrowed is another factor that can influence APR. To lower your car loan APR, consider putting together as much cash as possible for your down payment.

What is representative APR?

When researching car loans, you’ll see the term representative APR used by brokers and lenders. This is the rate that at least 51% of customers will receive. Of course, some customers will enjoy lower rates while others will receive higher rates.

Representative APR takes this fluctuation into account and offers borrowers a general idea of what to expect. Ultimately, it’s a transparent way to compare rates offered by different brokers or lenders. The bottom line? Use representative APR as a guide, not a guarantee.

How do I find out the exact APR of a car loan?

You’ll need to continue with your application to get an exact car loan APR quote. Also called a ‘real’ or ‘personal’ rate, the figure is tailored to match your unique credit profile, financial history and personal circumstances.

Ideally, brokers should be able to calculate an exact car loan APR using a soft search. This type of search doesn’t leave a permanent mark on your financial history and won’t affect your credit score or future applications.

Tips for lowering your APR

APR can have a big impact on the total cost of your car loan. So, it makes sense to be proactive when it comes to lowering your APR. Here are some strategies to help you secure the best rates:

Boost your credit score

From paying off outstanding debts to registering on the electoral role, there are a few quick and easy ways to boost your credit score.

Increase your down payment

A larger down payment can reduce the amount you need to borrow, which can help bring down your car loan APR.

Choose a shorter repayment term

While it can be tempting to stretch out your loan for as long as possible to bring down your monthly payments, opting for a shorter repayment term typically reduces APR. In the long run, you’ll pay less.

Score the best APR with My Car Credit

One of the best ways to secure a good car loan APR is to work with an experienced broker. At My Car Credit, we specialise in helping Brits secure finance on all kinds of cars, from zippy Ford Fiestas to adventure-ready Range Rovers. Whatever your budget, financial history or credit score, we can help you unlock the best possible APR from trusted lenders.

Use our handy car finance calculator to get the ball rolling, or get in touch with a friendly member of the My Car Credit team today to find out more.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

8 Benefits of an Auto Loan Payment Calculator

From commuting to work to visiting friends and family on weekends, Brits across the country rely on cars to get them from A to B. Up there with buying a house, cars are a major purchase, so it makes sense to arm yourself with as much knowledge as possible when committing to a sale. This is where an auto loan payment calculator steps up. Fast, simple and easy to use, these handy tools make it easy to crunch your numbers when shopping for a new car.

In this article, we’ll take a closer look at the benefits of using an auto loan payment calculator and why every new car search should start with this simple step.

The popularity of auto finance in the UK

Before we get started, let’s take a moment to spotlight the popularity of auto finance in the UK. In 2022, Finance & Leasing Association (FLA) members provided more than £50 billion to fund the purchase of cars in the UK. Why is auto finance such a popular choice for Brits? Here are some of the benefits:

Affordability

The option to make manageable monthly installments instead of a large lump sum is one of the key benefits of auto finance. Many Brits don’t have the funds to purchase a new car outright but can easily commit to monthly payments. This model allows Brits to get behind the wheel of cars that may otherwise be out of their budget.

Flexibility

From Personal Contract Purchase (PCP) to Hire Purchase (HP), there’s plenty of flexibility when it comes to auto finance. There’s no need to adopt a one-size-fits-all approach. Instead, borrowers are free to choose contract and payment terms that match their unique needs.

Regular vehicle upgrades

Unlike owning a car outright, auto finance allows motorists to upgrade to a newer vehicle more often, typically every two to three years. This makes auto finance an appealing option for motorists who love to have access to the latest makes, models and cutting-edge technology.

Zero maintenance

Most auto finance plans include comprehensive maintenance packages, which eliminates some of the biggest costs associated with car ownership. This peace of mind is a huge draw for many motorists.

Why use an auto loan payment calculator?

Crunching your numbers doesn’t have to be a headache. Here are the benefits of an online calculator:

1. Finetune your budget

Cars are one of the biggest purchases made by Brits, so it makes sense to finetune your budget before you commit. Auto loan payment calculators make it easy to punch in your numbers and generate instant data. Simply input information like the loan amount, preferred repayment term and personal credit rating to generate an instant quote estimate.

When you’re ready to proceed with your application, more information like your income, financial history, job status and personal circumstances is used to generate a more accurate quote.

2. Compare repayment terms

The total cost of your car loan can vary significantly depending on your chosen repayment terms. Auto loan calculators make it easy to compare different repayment terms and choose a timeframe that fits your budget. For example, the monthly cost of a £7,500 loan with a repayment term of three years is around £243. In comparison, the monthly cost with a repayment term of five years is around £160.

3. No impact on your credit score*

Using an auto loan payment calculator allows you to learn more about your budget and potential borrowing power, without affecting your credit score. Instead of hard searches that leave a footprint on your credit history and can raise red flags for potential lenders, an auto loan calculator gives you the freedom to explore your options with zero repercussions.

4. Transparent cost analysis

Auto loan payment calculators break down the cost of financing and make it simple and easy to understand. You’ll get an instant idea of the principal amount borrowed vs how much you will pay in interest over the lifetime of the loan. This amount is determined based on the average Annual Percentage Rate (APR) secured by borrowers. This transparency helps British borrowers make smart and well-informed decisions when it comes to auto loans. It’s a philosophy that all brokers authorised and regulated by the Financial Conduct Authority (FCA) should adhere to.

5. Avoiding overcommitting

Calculating monthly payments in advance helps borrowers take out realistic and manageable loans. This proactive approach to auto finance helps prevent overcommitting and avoid financial stress down the line.

6. Borrow from trusted lenders

The best auto loan payment calculators are designed to connect borrowers with trusted lenders. For example, at My Car Credit we work with Evolution Funding Limited to match your application with a large panel of auto finance lenders.

7. Find the best match for your needs

Auto loan payment calculators don’t just match you with lenders. The best tools use specialised technology and algorithms to select the best products for your needs. This not only improves your chances of acceptance but unlocks the best possible rates.

8. Free to use and obligation free

Auto loan payment calculators are completely free to use. There are zero obligations to commit to a loan or even finalise an application. This makes car finance payment calculators a great option for both serious buyers as well as motorists who are in the very early stages of researching loans.

Crunch your numbers today with My Car Credit

Whether you’re purchasing your first car or looking to upgrade an existing vehicle, there are no downsides to using an auto loan payment calculator. Fast, easy and transparent, the auto loan payment calculator from My Car Credit is designed to streamline the finance process. It not only helps you budget, but also gives you a clear and accurate look at the total cost of your loan. It’s this transparency that makes auto loan payment calculators such a valuable tool for motorists looking to make informed and financially responsible decisions.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

apr calculator car finance calculator car financing credit rating credit score Jan24 repayments

Car Finance with Fair Credit: What You Need to Know

While some Brits enjoy a glowing credit score, others aren’t so fortunate. Credit scores can slip for all kinds of reasons, from missed payments on credit cards to lack of financial history. Wondering if you’re eligible for car finance with fair credit? This article is for you. Read on to find out more about car finance with fair credit and what you need to know before finalising an application.

What is considered “fair” credit?

The first step is to understand exactly what “fair” credit means. UK lenders use three major organisations to source credit scores – Experian, Equifax and TransUnion. Each uses a different system to determine credit scores. Here’s a quick overview of what’s considered “fair” by each:

Experian – 721 – 880

Equifax – 380 – 419

TransUnion – 566 – 603

Fair is preceded by rankings of “good” and “excellent”. At the lower end of the scale is “poor”, which is anything below the lowest numbers listed above.

Why credit scores matter

Credit scores are one of the most useful ways for lenders to evaluate the financial history of potential borrowers and assess overall risk. Experian, Equifax and TransUnion use information like your direct debit history to assess your borrowing patterns and assign an individual credit score. They’ll also look at hiccups like missed payments and multiple credit card applications.

The higher your score, the less risky you’re considered. Applicants with strong credit scores enjoy a suite of benefits, including higher credit limits, lower interest rates and an increased chance of success. However, a lacklustre credit score doesn’t necessarily rule out car finance. You still have options, which is why it’s important to connect with experts who specialise in securing car finance with fair credit.

Can I get car finance with fair credit?

Fair credit doesn’t mean you have to rule out car finance. With the right broker and a strong application, you can still secure auto finance with a less-than-perfect credit score.

What to expect when applying for car finance with fair credit

Applying for car finance with fair credit isn’t always as straightforward as applying with an excellent score but it is possible. Here’s a quick overview of what to expect and consider throughout the process:

Stay realistic

Lenders are far more likely to approve your application if your expectations are realistic. For example, an affordable model like a Hyundai i10 is a much better choice than a luxury car like Land Rover. Similarly, considering buying used instead of new can be a great way to save money and win over lenders.

Be proactive about boosting your score

You can’t go back in time and make that missed credit card payment. But you can boost your credit score by doing things like joining the electoral role.

Apply for car finance with fair credit today

Wondering if you’re eligible for car finance fair credit? Give My Car Credit a call today to discuss how we can help you secure car finance with fair credit, or a lower score.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car financing credit rating credit score fair credit Jan24 repayments

Is Car Finance Good for my Credit Rating?

As with any financial loan, if your credit rating is good, lenders will consider you as a more eligible candidate for a favourable agreement. But is car finance good for your credit rating? We break it down below.

Does car finance impact your credit rating?

If you apply for car finance with My Car Credit, we’ll perform a car finance eligibility checker before advancing your application. This is a soft search of your credit score, meaning that it won’t impact your overall rating. It allows us to see your financial history without leaving any mark on your credit file.

If we decide that you’re a viable candidate for car finance, we’ll advance your application. At this point, our credit check will be hard, meaning that lenders will have access to your details and your rating will take a hit.

Is car finance good for your credit rating?

There are two main ways that car finance can improve your credit rating.

It’s also worth being aware that when you first apply for car finance and undergo a hard credit check, your overall score may dip because you’ve taken on a new loan.

Making timely repayments

The most important factor to a credit score is payment history. As such, if you make all of your monthly repayments on time and in full, this will build up your credit rating over time.

Diversifying your credit mix

A credit mix refers to the type of loans in your credit file. Having a diversified credit mix can improve your credit score, because it indicates that you can handle different types of loan.

Car finance counts as instalment credit, whereas a credit card is revolving credit. Adding car finance to your credit file diversifies it, which lenders look on favourably.

Can car finance damage your credit rating?

Car finance can negatively impact your credit rating if you don’t make your monthly repayment schedule. If you don’t make your instalment in full, or if you miss it entirely, this can negatively impact your credit score.

In these instances, you’ll be given a short period in which you can make the loan up. If you fail to make this payment, your ‘delinquent’ loan will be reported by the lender to major credit bureaus. This will negatively impact your credit rating.

If you miss several payments, lenders will declare your loan in default. The account will be passed over to debt collectors and your car may be repossessed. All of these negatively impact your credit score.

Find out more about car finance and credit ratings

To find out more about the kind of car finance we offer, as well as how it could impact your credit rating, contact My Car Credit on enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car financing credit rating credit score Jan24 repayments

Why Was I Denied a Car Loan with Good Credit?

A good credit score can feel like a gold star on your financial history report. But unfortunately, a good credit score doesn’t guarantee approval when it comes to car loan applications. If you’ve been denied a car loan with good credit, this article is for you.

Below, we go into more detail about why a good credit score isn’t the be-all-and-end-all for car loan applications. We also take a look at how to overcome the hurdle, and what you can do to increase your chances of securing finance with a trusted lender.

What is a credit score?

Before we start, it’s important to define what a credit score is and why it matters. Basically, a credit score measures the overall health of your financial situation. A high score presents you as a reliable and trustworthy borrower, while a low score indicates a higher level of risk and an increased chance of defaulting on your loan. The higher your score, the more appealing you are to lenders.

Scorecards are used to calculate your credit score and create an overall picture of your borrowing behaviour. Information like your credit card repayment history and previous credit applications, as well as factors like your electoral roll status and address history, can affect your credit score. That said, your credit score isn’t the only factor considered by lenders when assessing car loan applications. This means you may be denied a car loan with good credit.

Good vs poor credit history with Equifax, Experian and TransUnion

In the UK, three major platforms are used to calculate credit scores – Equifax, Experian and TransUnion. All use a different number system, so don’t worry if your credit score varies between platforms.

Equifax: 0 – 1000
Experian: 0 – 999
TransUnion: 0 – 710

Experian classes 881-960 as good, while TransUnion’s threshold is 604-627 and Equifax goes as low as 420-465. As you can see, a good credit rating with one credit agency doesn’t mean you’re always classed as low risk. It depends which agency is used by each lender.

What doesn’t affect a credit score?

Credit scores are used to assess your financial history and give lenders an idea of your reliability when borrowing money. They’re not designed to reflect your overall wealth or purchasing power. The following criteria aren’t considered when calculating your credit score, however they may help explain why you were denied a car loan with good credit.

Student loans
Savings account balances
Employment history
Parking tickets or driving offences
Criminal record
Medical record

Reasons why you may have been denied a car loan with good credit

If you’ve been denied a car loan with good credit, here are some common reasons to consider. They don’t affect your credit score directly, but they can have an impact on the final decision of the lender.

Financial links

It’s important to understand that you’re not necessarily the only person assessed when applying for car loans. Financial connections to irresponsible borrowers, such as partners, family members or flatmates, can have an impact on your success rate and may help explain why you’ve been denied a car loan with good credit.

For example, if your legal partner has a lacklustre borrowing history and a poor credit score, this can impact your chances of a successful application. Even if you’re no longer together, they’re still considered a financial risk. Similarly, if you once shared utility bills with an irresponsible ex-flatmate, their borrowing behaviour can have an impact on your car loan application.

These types of financial links won’t affect your personal credit score, but they may be considered by lenders when assessing applications and calculating the overall risk factor. Lenders may check the credit reports of these individuals and use data to make a final decision on whether to approve or deny your application.

Check the Financial Associations section in your Credit Report to find out if you have any links. Depending on whether the connection is still active, it may be possible to submit a disassociation request and remove the person from your Financial Associations list.

Employment status and salary

The ability to repay your loan is a major factor considered by lenders. They won’t hesitate to follow up on employment and salary information stated in your application, and if the numbers don’t match up, your loan may be declined. This means that even with a stellar borrowing history, you may be denied a car loan with good credit if your employment status and income can’t be verified.

Another issue in this respect comes when you’re self-employed. While it’s great to work for yourself, this can negatively impact your ability to get car finance because it’s less secure than income from an employed position. Working for yourself, your salary can fluctuate month to month and year to year, making it harder for finance companies to assess affordability – which brings us onto…

Affordability

One of the most important factors for any finance company is affordability. Lenders want to know whether you can afford the repayments based on your current circumstances. While your credit rating reflects your history with finance companies, it’s also important to consider your incomings and outgoings.

As well as your salary, they’ll look at existing financial commitments like mortgage payments, utility bills and personal loans. If you’re already in financial difficulty, regardless of your credit history, you could be refused car finance.

Inconsistency in applications

Lenders don’t just check your current application. They may also cross-reference it with previous applications. Inconsistencies can raise instant red flags and may explain why you’ve been denied a car loan with good credit. For example, an application that states a £100,000 salary preceded by an application that states a £30,000 salary may be flagged.

Existing debt

Current debt isn’t factored into your personal credit score. However, it may be considered by lenders when assessing car loan applications. Ultimately, they want to be sure you can repay the amount you borrow. For example, if you apply for a £50,000 car loan but have credit card debt of £10,000 and a home mortgage of £300,000, your application may be flagged as high risk. It doesn’t necessarily mean you’re ineligible for a car loan, but it is something to consider when investigating why you’ve been denied a car loan with good credit.

What to do if you’ve been refused car finance

At the end of the day, no application is guaranteed, regardless of how high your credit score is. Lenders will always scrutinise applications and consider a variety of criteria. It’s important to understand exactly what goes into the decision making process to maximise your chances of success.

Review your application

If you’ve been refused car finance, the simplest thing you can do is review your car finance application. Look for any inaccuracies such as your address, salary and other financial information. Many lenders may point these out to you to help you get car finance.

Apply for a cheaper deal

Another simple trick is to apply for a cheaper deal that suits your personal circumstances. You could find a cheaper car, which would mean lower monthly payments.

You can also check the different types of car finance available.

Pay off existing debt

If you have lots of existing credit agreements, you might want to consider paying some off before applying for car finance – if you have the means to do so, of course. This could reduce the risk for lenders, as you’ll be in a better position with fewer outgoings and only one lender (or a select few) to repay.

Denied a car loan with good credit? We can help!

Being denied a car loan with good credit is frustrating. The good news is, we’re here to help. At My Car Credit, we have access to one of the largest and most diverse lending panels in the UK. This helps us to match your application with a wide range of trusted lenders, instead of the usual high street banks.

My Car Credit is fronted by a dedicated team of experts who can help you understand more about car finance eligibility and get to the bottom of why you’ve been denied a car loan with good credit. It’s this commitment to success that helps our customers get behind the wheels of their dream cars faster.

To discover how My Car Credit can help you obtain the right car finance, check out our online calculator to crunch the numbers on financing your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car financing car loan credit score employment finance Jan24

What is the UK Consumer Duty?

Thinking about taking advantage of finance options to purchase a new car? The Financial Conduct Authority (FCA) has your back with new rules designed to protect the interests of consumers and improve the overall finance experience. Known as UK Consumer Duty, the regulation was launched by the financial regulatory body in late 2022 and has been hailed as a “paradigm shift” for the finance industry.

Want to know more about Consumer Duty? Read on as we unpack everything you need to know about the new requirements, including the key benefits for consumers.

The key goals of UK Consumer Duty

At its core, UK Consumer Duty exists to ensure lenders “act to deliver good outcomes for retail customers”. For lenders to be approved by the FCA, they must offer products that meet the following cross-cutting rules published in the official Consumer Duty document:

Act in good faith towards customers
Avoid causing foreseeable harm to customers
Allow and support customers to pursue their financial objectives

“Our new Duty sets higher and clearer standards of consumer protection across financial services, and requires firms to put their customers’ needs first,” reads the FCA website.

Targeted outcomes for Consumer Duty

In addition to an underlying set of rules, the FCA has released four targeted outcomes for UK Consumer Duty:

Fair value – consumers receive fair prices and quality.
Suitability and treatment – consumers receive suitable products and services, as well as good treatment.
Confidence – consumers have strong confidence and levels of participation in markets.
Access – diverse consumer needs are met.

The current state of lending in the UK

The latest statistics from the Finance and Leasing Association (FLA) reveal just how prevalent car finance is in the UK. In 2023, lenders issued a huge £115 billion of credit to British consumers. Motor finance represents around £50 billion of the total figure. No arguments here. Auto finance plays a critical role in getting Brits into the driver’s seats of cars.

Car finance is popular when purchasing used cars. However, new private car registrations are where car finance really steps up. In 2022, a huge 84% of all new private car registrations were purchased using finance.

Building on existing protection

Consumer Duty isn’t the only legislation designed to protect British car buyers. You’re already protected by several statutes, including the Consumer Rights Act passed by the government in 2015. You’re also protected by the Consumer Protection from Unfair Trading Regulations passed in 2008.

Introducing the 12^th FCA principle

Previously, the FCA had laid out 11 core principles firms must comply with when lending money to consumers. These include the fair treatment of customers, transparent communication with regulators like the FCA, and overall integrity when conducting business. UK Consumer Duty has been added as a 12^th principle and builds on the existing rules required by the FCA.

As mentioned above, Consumer Duty requires lenders to act in good faith towards customers, avoid causing harm and actively work to support their financial objectives.

For example, if a customer clearly states they would like the option to purchase the car at the end of a finance agreement, lenders should not recommend a lease, as this doesn’t include an option to purchase the vehicle at the end of the agreement. This would not be a positive outcome for the consumer and would therefore not meet Consumer Duty rules. Instead, lenders should actively help consumers achieve good outcomes. In the above example, the lender could recommend PCP finance, which would allow the customer to purchase the car at the end of the agreement.

Who does UK Consumer Duty apply to?

UK Consumer Duty applies to all lenders regulated by the Financial Conduct Authority. As the UK’s biggest and most influential financial watchdog, the FCA has enormous sway when it comes to consumer lending. This includes:

High street and online banks
Insurance companies
Car dealers offering finance packages

What does the FCA say about Consumer Duty?

Matthew Long, Director of Payments and Digital Assets at the FCA, recently distributed a letter to all lenders regulated by the watchdog.

He wrote, “We recognise that the implementation of the Duty comes at a challenging time. However, we believe that embedding the Duty effectively will help payments firms continue to build trust amongst consumers in using the expanding range of products and services and enable the sector to continue to grow in a way that delivers consistently good outcomes for customers.”

He adds the goal is to trigger a “shift in culture and behaviour” and prompt lenders to keep the best interests of borrowers in mind at all times. “Whilst we appreciate that the facts of these can be hard to establish, firms should ensure that their treatment of customers who feel themselves to be victims and are distressed is not unduly harsh or unsupportive,” adds Long.

The UK Consumer Duty deadline

While Consumer Duty was announced in 2022, the legislation won’t officially launch until August 1, 2023. This means lenders have time to adjust their policies and products to meet the new requirements. Consumer Duty isn’t retroactive, which means loans offered before August 1 don’t need to meet the new requirements.

Will I benefit from UK Consumer Duty?

Consumer Duty was introduced to protect the interests of consumers using financial packages. If you’re considering using one of the following products after August 1, 2023, you will benefit from the new Consumer Duty rules:

Personal Contract Purchase
Hire Purchase
Leasing deal

If you purchase a car outright, you won’t be using finance options and therefore won’t be protected by Consumer Duty.

Take advantage of new Consumer Duty protection

There are big changes on the horizon – and thanks to the new Consumer Duty protection rules, there’s never been a better time to take advantage of motor finance. At My Car Credit, we work with a wide range of FCA-approved lenders. Plus, our user-friendly calculator is designed to help you figure payments on car loan, just one of the ways we tick the UK Consumer Duty boxes!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car financing consumer duty fca principle 12

How to Improve Your Credit Score for Car Financing

Although there are ways of securing car finance with a poor credit rating, when considering your car finance eligibility, a good indication of your viability as a candidate is the health of your credit score. Don’t panic if yours is less than ideal, though, as there are steps you can take to improve it.

Don’t forget that you can get a free credit score with Experian. Use this to gauge where your credit rating is and improve it if it’s on the lower side – bear in mind that different credit rating agencies (CRAs) use different numerical scales to adjudicate your credit score.

Improving your credit score for car financing

These are a few of the best ways to improve your credit score if you’re trying to secure car finance. A better credit score will mean you are a more favourable candidate for a finance agreement, and may result in lower interest rates overall, so it’s worth improving your overall rating if you can.

Double check your report

Some of the best ways to improve your credit report are the easiest. Double checking your credit report for any small mistakes – like a mistyped name or wrong address – is one of the best ways of improving your overall score.

If you do notice a mistake, contact your provider and ask them to amend it.

Register to vote

Exercising your right to vote is essential in many ways, not least because registering on the electoral roll at your place of residence is an easy way of improving your credit score.

Even if you live with your parents or are in shared accommodation, this is a critical step you can take towards improving your rating.

Pay your bills in a timely fashion

Hitting your regular payments on time and in full is a sure-fire way of improving your credit score. In fact, your payment history is arguably the most important factor that impacts your overall rating. Late payments or those not made in full will impact this history, and in turn effect your score.

Even making the smallest payments on time – for example, repaying your monthly phone bill – adds up, so stay on top of these as far as possible.

Lower your credit utilisation ratio

Your credit utilisation – typically expressed as a ratio – indicates the percentage of total available credit that a borrower is currently making use of. After your payment history, it’s the second most important factor in determining your credit score.

A low credit utilisation indicates that you’re only using a small percentage of any credit available to you. As such, you’re a less risky candidate for a loan. The higher your credit utilisation ratio, the riskier you are, and you might face higher interest rates as a result.

As such, if you’re looking to improve your credit score for car financing, you should aim to avoid taking on any new debt right before applying, as existing credit card debt will increase your credit utilisation ratio. It’s good practice to avoid maxing out your credit cards every month generally, but particularly important if you’re applying for a finance agreement.

Avoid frequent hard credit checks

When you apply for a loan or credit, you’ll face a hard credit check at some point. This will lower your credit score. Although this bump is only temporary, lasting a few months or so, if you have a number of these hard credit inquiries registering on your report in a short period of time, you’ll be a riskier borrower.

By submitting multiple applications for the same kind of loan or finance agreement within a certain period of time, you can avoid having multiple hard enquiries register on your report, as these will all be considered one hard inquiry. For example, FICO will group applications for a similar kind of loan if they are made within a 45-day period.

Practice good security habits

Unfortunately, identity theft is a threat of modern life, and if someone is pretending to be you and taking out credit in your name, this could negatively impact your credit rating.

Being savvy with your security helps to avoid this – don’t repeat passwords, and check your bank account frequently for fraudulent activity.

Find car finance today

My Car Credit can help individuals from all walks of life to secure affordable, accessible finance – and our initial credit check is only ever soft. Find out how we can work with you no matter your credit score by emailing enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car financing CRA credit profile credit score improve credit score Jan24

What Does ‘Finance’ Mean When Buying a Car?

When it comes to car finance, there’s a lot of jargon and acronyms, and it’s easy to find yourself questioning what each finance agreement really means.

This post aims to help you get to grips with what different types of finance actually mean when buying a car, and how they work. Once you’ve understood the different kinds of agreements available, you’ll be on your way to securing a car loan quote that will work for your circumstances.

So, what does ‘finance’ mean when buying a car? Read on to learn more…

What does ‘finance’ mean when buying a car?

In essence, car finance makes the purchase of a car more affordable. It’s a credit agreement between you and the lender, allowing you to make full use of the vehicle whilst paying it off in cost-effective monthly instalments according to a pre-agreed schedule. The amount you pay off will also include additional interest on top.

What are the different kinds of car finance?

The right car finance for you will depend on the kind of agreement and terms that you’re looking for, as well as your own driving preferences and needs.

Car loan

A car loan is a type of personal loan but is specifically designed for use on vehicles.

With a car loan, you borrow the money from either a bank or building society. Once you’ve bought the car, you are its outright owner. You’ll repay the car loan over time via instalments, with added interest. Typically, a car loan is more likely to be granted to those with a good credit score – there are other kinds of car finance available for those with poor credit ratings.

Personal Contract Purchase (PCP)

Do you like mixing up the vehicles you drive? Are you happy sticking to mileage caps or paying excess fees for any vehicular wear and tear? Would you like flexibility in choosing whether or not to own the vehicle at the termination of the agreement? Then PCP is potentially the car finance for you. In fact, PCP is the most popular kind of car finance because of its low monthly repayments and flexibility.

With PCP car finance agreements, you’ll pay a deposit and monthly instalments (plus interest). The larger your deposit is, the lower these payments will be. These payments are typically lower than other kinds of car finance as you’re only paying for the car’s depreciation in value during the time that you’re using it.

You can also choose whether or not you want to own the car once you’ve fully paid off the finance. If you do, you’ll pay a final balloon payment to make up the remaining value of the car. If not, you can hand the car back to the dealer with nothing more to pay. Be aware that you won’t own the car unless you opt to do so at the agreement’s termination.

Hire Purchase (HP)

Hire purchase car finance is similar to PCP, but a little more straightforward. You’ll typically make a deposit of around 10% with HP finance, then make fixed monthly payments according to a pre-determined schedule. Repayment terms can be relatively flexible, and there are often competitive interest rates with HP finance.

Like with PCP, you won’t own the vehicle until you’ve made the final repayment of your agreement, but you can opt to do so with a final balloon payment. After this, you can choose to part exchange, sell or keep the car. However, unlike PCP, you won’t usually face mileage caps, so HP finance may be preferable for you if you’re regularly making long journeys.

Personal Contract Hire (PCH)

PCH car finance is when you lease the car, which is why it’s also known as a car leasing agreement. You will never be its outright owner – you’re essentially hiring it until the end of your finance agreement. In this way, PCH differs from either HP or PCP. Though it’s technically not car finance, as you’re not borrowing money, you’ll still see this term frequently used when discussing car financing options.

With PCH, you’ll typically pay a non-returnable deposit as well as your monthly repayments. At the agreement’s end, you’ll hand the car back. If you’ve gone over the mileage cap or have made unreasonable vehicular wear and tear, you’ll pay a penalty fee.

Find the right car finance for you with My Car Credit

Shopping around for car finance can seem stressful, but it needn’t be. My Car Credit aims to make the process of securing your dream deal stress-free and streamlined. Contact our expert team today on enquiries@mycarcredit.co.uk to start your car finance journey.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance options car loan finance options hire purchase Jan24 pch PCP

Car Loan Early Repayment – Is It Worth It?

There are many reasons why people consider paying off their car finance early. But whether you are eligible to do so depends on your personal circumstances, as well as the details of your car finance agreement.

You should expect to pay a settlement fee if you opt for early repayment of your car loan. As such, whether or not early repayment is worth it will vary from person to person, but you do need to think hard about whether you can afford to do so.

What is an ERC?

An ERC (early repayment charge, also known as a settlement figure or resettlement fee) is a penalty charge that you’ll likely have to make if you opt for early repayment of your car loan. This charge typically amounts to two months’ worth of interest, depending on your lender. Whether or not your car finance lender will charge you an ERC, depends on their policies and the type of car finance agreement you have.

Before you decide on an early repayment, it’s essential to know whether you may be liable to pay an ERC, so check with your finance provider first. Once you’ve asked them for this figure, you usually have around 28 days to decide if you want to proceed with the early repayment of your car loan.

How does car loan early repayment impact your credit score?

You may think that making an early repayment of your car loan would improve your credit score, but this isn’t necessarily the case.

If you pay off your car loan early, the account will show as closed within your credit report. It’s only open accounts that have an impact on your credit score, and other lenders sometimes like to see these accounts, so they can gauge how timely you are with repaying your debt. However, once your car finance account is closed, any benefit on your overall finance management won’t be evident on your credit report.

If you need your credit report to work in your favour – for example, if you’re applying for a mortgage or re-mortgaging – then you may be better off keeping your car finance open on your credit report.

Is it worth early repayment of a car loan?

Whether or not the early repayment of your car finance is worth it depends entirely on your situation and the terms of your agreement. You need to ask yourself whether you can truly afford the early repayment or settlement fees, and whether it might be beneficial to stay in the finance deal for the sake of your credit score.

Other factors to consider include whether you’re in negative equity. Essentially, if the settlement figure that you’ll have to make for early termination is higher than the value of the car, it’s probably worth waiting out your car finance term in full until you’re in positive equity.

Similarly, if you’re already close to the end of your finance term, it’s likely cheaper to stick to your current finance deal and finish all of your repayments, rather than face the settlement (ERC) fee.

Returning the vehicle

Another factor to consider if you’re on either HP or PCP finance is whether you want to return the car at the end of the finance term. Under the Consumer Credit Act of 1974, you can opt for ‘voluntary termination’ of the agreement, provided you’ve already paid half the cost of the car or will make up the difference between what you’ve paid and that number. However, if you do so, you won’t be able to return the car to the finance provider – you will be its legal owner.

This may be beneficial if the car’s value is higher than that of your remaining payments, as, once you’ve paid any settlement fee, you can then sell the car on and make a profit. But you may still be charged by your lender if you opt for voluntary termination. This amount is capped by law, but it’s still worth considering. Companies may also react badly to frequent voluntary terminations on your credit file, too.

Discuss your car finance needs today

If you want to get a car finance quote, discuss early repayment of your car loan, or have any further questions about the process, you can email My Car Credit on enquiries@mycarcredit.co.uk today.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance options car loan credit score early repayment Jan24

Refused Car Finance – What to Do Next

Car finance can be a fantastic way to secure the keys to your dream ride. However, it’s not uncommon to be refused the first time around. There are all kinds of reasons why you may have been refused car finance, some easy to overcome and others a little more complicated.

The good news is, there are always options. If you’ve been refused car finance but believe you’re a reliable and worthy borrower, this guide is for you! Read on as we cover everything you need to know about how to deal with a rejected car finance application, what to do next and the steps you need to take to get behind the wheel of a new car.

Step 1: Understanding why you were refused car finance

The first step is to get a better idea of why you were refused car finance. Understandably, most lenders are strict about who they approve for finance. After all, a car finance loan is a big commitment and lenders want to make sure they recoup their investment. Here’s a few of the most common reasons why you may have been refused car finance:

A bad credit score

A bad credit score is one of the most common reasons applicants are refused car finance. Most lenders use consumer credit reporting agencies such as Equifax or TransUnion to assess the suitability of car loan applicants. Equifax issues scores of between 0 and 700, with the average Brit clocking in at around 380. TransUnion rates borrowers on a 0 – 710 scale, with averages in the UK sitting at around 610. Experian is another popular agency and ranks you on a scale of 0 – 999.

Why do you have a low credit score? It’s due to poor credit history. Credit reference agencies keep track of bad credit activity, such as missed payments on utlity bills, outstanding debts on finance or a lack of steady income. Hard searches on your credit file typically display this for up to six years before the date you’re applying.

It’s not always easy to maintain a glowing credit score, as many Brits know. If you’ve ever missed a payment on your credit card, you’re not alone. The latest YouGov research revealed around 15% of UK adults have defaulted on credit card payments, which can knock a decent amount of points off your credit score. The figure is even higher in London, where 19% of credit card holders have missed a payment.

An ambitious budget

In other cases, your budget may be too ambitious for car finance lenders to approve. When assessing your application, lenders will consider personal circumstances, such as your employment status, income and ongoing life expenses to determine if you can afford the loan. If there are any doubts, your application may be refused.

Let’s say you want a hire purchase deal that costs £500 a month and you have regular income of £2,000 from your monthly salary. You might think applying for car finance is a sure-fire thing. But once you factor in mortgage or rent payments, utility bills and other typical outgoings, you might only just have enough left to make the payment to your finance company.

Even with a good credit score, it might be too much. But pair that with a less-than-perfect credit score, and many lenders won’t want to take the risk. As well as risking missed or late payments for themselves, mainstream lenders have to lend responsibly to avoid finance agreements leaving customers worse off. So, without the right affordability, lenders could refuse your car finance.

Incomplete application

Your application doesn’t just offer lenders insight into your borrowing history but also your competency and organisational skills. Incomplete applications can be an instant turnoff for lenders, so it pays to give your documents a thorough once over before hitting send.

When you apply online, it can be tempting to send old documents that are stored on your computer or phone, for example. Maybe you have recently changed address, meaning you’ll need different documents to apply for car finance. That’s often the case for younger customers who have just moved out having passed their driving test!

Finance companies have their own criteria, so every little error could negatively impact your chances of securing that dream car.

Now you have a better idea of why you were refused car finance, let’s take a look at what to do next…

Step 2: Enlisting the help of experts

Car finance can seem complicated but with the help of experts, it doesn’t have to be. At My Car Credit we specialise in getting Brits into the driver’s seat of their ideal car, no matter what their credit score. How do we do it?

A large lending panel

With access to one of the largest lender panels in the country, we take a wide-reaching approach to car finance. Instead of considering just a handful of preferred lenders, we reach out to dozens of finance companies across the country. This drastically improves your chances of being approved for car finance, no matter what your circumstances, borrowing history or credit rating.

If your credit profile doesn’t meet one lender’s criteria, you still have a chance of being approved by one of our other lenders. That’s how we secure finance agreements for young drivers, self-employed applicants and more.

Award-winning technology

We’re part of Evolution Funding, one of the largest and most trusted car finance brokers in the UK. Our service is backed by their award-winning technology, making it faster and easier for us to match your loan application with the right lender.

A personalised approach

There’s no one-size-fits-all approach at My Car Credit. We assess every car finance application individually, meaning you’re matched with the best possible lenders for your unique circumstances. If you’ve had previous rejections due to a poor credit rating, that doesn’t mean you can’t get car finance with us.

For more information, check out our guide on car finance explained.

Step 3: Improve your chances of a car finance agreement

After you’ve developed a good understanding of why you were refused car finance and have enlisted a team of experts to help with your application, it’s time to start improving your chances. Here’s how:

Boost your credit score

There are lots of ways you can boost your credit score, some easy and others requiring a little more time and dedication. Registering on the electoral roll and keeping on top of regular payments such as a credit card repayments or your phone bill are both great ways to improve your credit score. If your credit score is lacking due to a lack of financial history, applying for a basic credit card can be a good way to develop a positive paper trail that establishes you as a reliable borrower.

Pad out your deposit

A small deposit suggests you’re just scrimping by and can be a red flag for lenders. Saving cash where you can and using it to pad out your deposit is a foolproof way to improve your status as a borrower and show lenders you can commit to a regular savings regime.

If you can afford a larger deposit sum upfront, it’s always worth putting it towards your new car. It will reduce the total loan amount, making car finance less of a risk for the lender. It will also reduce your monthly repayments, so you can soon save back the money you added to your deposit.

Securing car finance with poor credit history

Just because you have a less-than-perfect credit history, it doesn’t mean you’re out of the running for a loan. With the right approach, your chances of securing car finance with poor credit are high. If you’re struggling with other barriers such as being self-employed or a lack of credit history, we can help.

At My Car Credit, we understand the difficulties you face with a poor credit rating. Not least that a hard search will stay on your credit file. That’s why we only use a soft search initially to get an idea of your credit profile before moving onto the next steps.

Whatever information we receive from the credit agency, the search won’t appear on your credit report. But even if we find you have bad credit, we can still work to get your application approved if repayments are affordable.

Ready to get the wheels moving on your application? Get in touch by emailing enquiries@mycarcredit.co.uk or give us a call on 01246 458 810 to find out more about how to proceed after being refused car finance.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance options credit score Jan24 poor credit refused

Understanding car loan APR

Is APR the same as interest rate?

Why is APR important?

What is a typical APR rate?

Fixed vs variable APR

Factors that can influence car loan APR

Personal credit score

Preferred loan term

Loan amount

What is representative APR?

How do I find out the exact APR of a car loan?

Tips for lowering your APR

Boost your credit score

Increase your down payment

Choose a shorter repayment term

Score the best APR with My Car Credit

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