credit rating Archives - Page 2 of 2

Can I Get a Car Loan Instantly Online?

When it comes to purchasing a vehicle, there are a number of ways to do so. Two of the most popular means are car loans and car finance. The type of finance agreement that’s right for you will depend on a number of things, including your credit rating and the speed with which you want the agreement to be approved.

Can I get a car loan online?

A car loan is a kind of personal loan that’s strictly for the purchase of a vehicle. Car loans are secured, and the amount that you borrow as well as the interest rate is typically dictated by the price of the car.

Finding a car loan can be done online, and it’ll typically only take minutes to fill out an application form. However, securing a car loan might not be quite so speedy.

How long does it take to secure a car loan?

The initial submission of a car loan application form can take mere minutes, but locking down that loan can take longer. It’s also worth noting that banks and credit unions will typically take longer to process applications than online lenders. The turnaround time will vary between providers, as will the length of time that you might wait for your loan to come in.

There a number of other factors that will impact how long it can take to secure a car loan…

Your credit score

Applicants for a car loan usually have to have a strong credit rating when applying – and if you’re opting for pre-approval of a car loan, having a good credit score is essential, as a hard credit check will be performed.

That’s why it’s worth doing your homework in advance to ascertain whether or not the lender to which you’re applying will accept less than ideal credit ratings, as well as determining whether your report has any errors or lists incorrect information. If you’ve got a poor credit rating, car finance may be a more accommodating option for you over a car loan.

Lack of documentation

When applying for either a car loan or car finance, you’re going to have to provide some personal information, which can also include documentation. Lacking these – or not submitting them in time – will delay your application, so it’s worth having these to hand.

Not doing your homework

As already detailed, you want to look over your credit rating in advance of your application to ensure there are no errors, but it’s also worth researching the car loan provider. Many institutions, for example, may have minimum income requirements for applicants, or only provide loans for specific vehicles. If you apply without doing your homework on the car loan lender, you could waste your own and their time.

Car loan or car finance?

If you have questions about whether a car loan or car finance is right for you, My Car Credit are here to help. You can contact us on enquiries@mycarcredit.co.uk today for help and advice.

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

Is car finance easier to get than a loan?

Car finance, personal loans – when it comes to purchasing a car, there are a number of ways that you can finance it. But is car finance easier to get than a loan, and how do these agreements differ? In this article, we’ll provide answers to all these questions, helping you to get in the driver’s seat (literally and metaphorically)!

Car finance vs. a loan – what’s the difference?

First up, you need to understand the difference between a loan and car finance. A personal loan involves borrowing money from a bank or other financial institution. You’ll typically repay this over a pre-determined series of monthly instalments (plus interest). Meanwhile, a car loan is a type of personal loan, but is for the specific use of purchasing a vehicle (as the name suggests).

Car finance is when either a financial institution or lender gives you a loan to finance your car. You’ll then pay this loan off with a series of monthly instalments (plus interest).

There are various different kinds of car finance. The right kind of car finance will vary between drivers, all of whom have different needs and preferences – for example, whether or not you want to be the vehicle’s owner, whether you can manage mileage and other caps, whether the agreement is secured, and the length of finance term and interest rate that you may face.

There’s a real difference between these types of car finance, but the two most popular are HP (hire purchase) and PCP (personal contract purchase).

Car finance vs. a loan – which is easier to secure?

A personal loan

There are advantages to funding a car with a car or personal loan. If you choose to do so, you’ll be seen as a cash buyer by a dealer, meaning you’re unlikely to face a deposit or any balloon payments. Unlike certain car finance agreements, personal loans are unsecured, meaning that you don’t have to put up any assets in order to secure them. With a personal loan, you’ll also be the legal owner of the vehicle, meaning that you can sell it whenever suits you.

When it comes to personal loans, it may be tempting to opt for longer repayment schedules, but be aware that this does mean you’re going to be paying higher interest costs overall as a result. It’s important to be reasonable in establishing your loan period, keeping monthly payments affordable whilst sticking to the shortest loan term you can get.

Whilst you can secure personal loans from a variety of banks and institutions, the sheer availability of loans might make shopping around to find the best one for you feel overwhelming. Typically, online car finance providers like My Car Credit will be able to do that work for you, providing a no-obligation quote that takes account of your needs and circumstances in mere minutes.

Be aware that personal (or car) loans will be credit score-contingent. Applicants with higher credit scores are going to be favoured more, and there’ll be less chance of securing a loan if your credit score is poor. For those of you who sit in this category and are looking for ways to finance a car, it’s likely to be easier to secure car finance than a loan.

Car finance

So, is car finance easier to get than a loan? Depending on your credit score, it may be easier to secure car finance than a personal loan. Many car finance providers like My Car Credit can help you to find car finance even with a poor credit rating, and initial credit checks tend to be soft searches – unlike with a personal loan.

The process of finding and securing car finance is also significantly quicker than when trying to locate a personal loan. Online application processes make your search quick and easy. They’ll also provide you with an almost immediate sense of the kind of finance term you may be eligible for.

Bear in mind, too, that because car finance is often a secured loan – meaning that the car is used as collateral – it can be easier to get than a personal loan. However, usually you will have to pay a deposit (typically around 10%), and if you fail to make your repayments in a timely manner, you’ll lose the car.

Start your car finance journey today

If you’re looking for an easy, flexible and affordable way to purchase a vehicle, get in contact with My Car Credit today on enquiries@mycarcredit.co.uk. We can discuss your car finance needs and help you find an agreement that suits you.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

PCP Finance Explained – Personal Contract Purchase Guide

Leasing vs Finance: What’s the Difference and Which is Better?

Check for car finance without affecting your credit score

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 car finance options car loan credit rating credit score Jan24 online car finance

Should I Keep My Car Until It Dies?

Purchasing a car is expensive, which is why people can opt to drive vehicles into the ground before upgrading. But if your car is on its way out, is it worth persevering until it dies?

Should I keep my car until it dies?

There’s no simple answer to this question. Whether or not you should keep your car until it dies is entirely dependent on your circumstances, as well as these factors:

Fuel

Many modern cars are far more fuel efficient than their older counterparts. A good rule of thumb is to assume that a fuel efficient car will cover 50 to 60 miles per gallon. If your vehicle is significantly below that and you regularly make long journeys, then there will likely be upgrades that you could make to save yourself serious cash – particularly given rising inflation and cost of living. In this case, it may be time to consider whether it’s worth trading in your old car for a more efficient one.

Repairs

If you’re regularly paying more on repairs than the car is worth, this is similar to being in negative equity, and it’s probably worth reconsidering whether or not the vehicle is worth keeping.

Your finances

If you’re asking yourself, “Should I keep my car until it dies?”, you should consider your financial situation carefully. You may not be financially able to purchase a new vehicle, particularly if your credit score is poor.

But there are ways of securing car finance that’s affordable and accessible. In fact, My Car Credit can work with drivers looking for car finance with a poor credit rating, and will help you to find a deal that suits your needs.

Find your dream car finance today

If you’ve got questions about how to secure affordable car finance, contact My Car Credit on enquiries@mycarcredit.co.uk. Our friendly team is on hand to address any concerns and answer any questions you may have.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How to Finance a Car in 4 Easy Steps

What is a Balloon Payment on a Car Loan?

How Do Balloon Payments Work?

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

credit rating credit score fuel efficient new car old car repairs

7 Factors That Can Affect Your Credit Rating

Credit ratings can be complex and at times, extremely frustrating. Even the smallest financial hiccups can leave a lasting footprint on your score. This means that a few missed credit card payments over the years or an outstanding mobile phone debt can compromise your application.

This is why it’s so important to develop a good understanding of your credit rating and the various factors that can affect your score. So, what can affect credit rating? Read on for our guide to factors than can influence your rating, as well as tips on how to boost your score.

Understanding credit ratings

Before we dive in let’s take a look at what credit ratings are and why they matter. Basically, credit ratings are used by prospective lenders to evaluate the overall credit risk of a debtor. Historic financial data is used to predict a borrower’s ability to pay back a debt and calculate the risk of defaulting. A particularly bad credit rating could see some applications rejected. In some cases, it could even rule you out of the lowest rate products.

The latest data from multinational consumer credit reporting agency Equifax reveals just how stubborn credit scores can be. Equifax report that the average Brit is issued with a score of 380. This is considered a ‘fair’ score but is just one point away from the 280-379 category which is considered ‘poor’. The perfect score is 700, suggesting everyday borrowers aren’t necessarily as upstanding as you might think.

Here’s some of the most common factors that can affect your credit rating:

1. Payment history

Keeping up with your credit card payments is one of best ways to build a good credit score. Even making the minimum monthly payment shows lenders you’re a responsible borrower. It also demonstrates that you can commit to a long-term loan. Missed or late credit payments can tarnish your credit score for up to three years. This is why it’s so important to stay on top of your repayments wherever possible.

2. Hard credit inquiries

Carried out by established financial institutions, hard credit checks dig deep into your credit history. They’re used to help creditors make lending decisions. Hard searches are often carried out when applying for larger loans such as mortgages, credit cards and car loans.

While a hard check or two will only lower your credit score by a few points, frequent checks can damage your score and present you as a higher-risk customer. This is because multiple applications suggest you’re chronically short on cash. It could even indicate that you have an irresponsible attitude towards debt. Hard credit checks can leave a mark on your report for around two years. It’s important to consider if you really need one before authorising a full application.

3. Being registered to vote

Lenders will often turn to the electoral roll as a quick and easy way to verify your name and address. Access to government-certified information is also an effective way for lenders to protect themselves against fraud. Failure to register or update your information can affect your credit score by up to 50 points. This can have a significant impact on finance applications.

4. Mobile phone contracts

While mobile phone contracts may seem like a sundry expense, they can have a big impact on your credit score. Like credit card repayments, staying on top of your phone contract is a good way to strengthen your credit score. This is great way of showing lenders that you can commit to a regular payment schedule.

5. Finances of a partner

If you’re married or in a long-term relationship, the finances of your partner will often be factored into your credit score. In some cases, joining forces can strengthen your application. However, if your partner has a ‘thin’ credit history, it may be best to disassociate yourself from them financially.

6. Borrowing percentages

Credit cards can be a good way to build a strong lending history. However, maxing out your cards can have a negative impact on your application. As a general rule of thumb, it’s best to keep your card borrowing below 25%, unless you plan to pay off the full amount every month. This shows lenders you’re responsible and realistic about the money you borrow, and your ability to pay off debt.

7. Utility bills

More than half of major energy providers are now sharing customer data with credit agencies. This makes is essential to maintain good standing with companies such as British Gas and EDF Energy. Utility bills are another good opportunity to establish a good track record with lenders and boost your credit score.

Factors that won’t affect your credit score

We’ve covered some of the biggest factors that will affect your credit score. Now let’s take a look at some of the things that won’t drag you down.

1. Your salary and disposable income

It’s a common misconception that high salaries translate to better credit scores. In fact, lenders are far more interested in how you manage your debts than how much money you earn. For example, an applicant who earns £35,000 a year and pays off their credit card in full every month is far more appealing than an applicant who earns £100,000 a year and has maxed out their credit card and defaulted on several payments.

2. Soft credit checks

While hard credit checks can leave a lasting footprint, their soft counterparts won’t affect your credit rating. What’s more, they can still give lenders a good overview of your credit history. They’re also known as ‘eligibility checks’ and are great for establishing the likelihood of acceptance before committing to a hard check.

3. Previous mistakes

Losing sleep over a mortgage you deferred on several years ago? Stressing about a credit card that got out of control in your twenties? The good news is mistakes you’ve made in the past don’t always stay around to haunt you.

For example, County Court Judgments (CCJ) issued when a borrower fails to repay money will stay on your record for up to six years. The good news is that they will automatically be removed after that period.

Black marks like Debt Relief Orders or Individual Voluntary Agreements (IVAs) can also have a negative impact on your credit score but won’t necessarily stay on your record forever.

Buying a car with poor credit

Need help securing a car loan? Whether you’re struggling with poor credit car finance or simply need assistance getting the best interest rates, we’re here to help. At My Car Credit we offer tailored car finance to applicants with all types of credit histories. Thankfully, this includes those with less than perfect scores. Get in touch today by emailing enquiries@mycarcredit.co.uk to find out more. We’ll help you secure the keys to your new vehicle as quickly as possible.

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

credit rating credit score Jan24

A Guide to Buying Your First Car on Finance

Man holding keys after buying first car on finance

Alongside graduating from school, college or university, starting work and moving out (bye-bye parents, hello freedom), buying a car is a pivotal moment for any young person. However, without the bank of mum and dad, many struggle to afford the lump sum payment, which is why car finance is an attractive and realistic option.

In this short guide, we’ll explain everything you need to know about buying your first car on finance, from improving your credit score and setting budgets to securing the best possible deals. While we’ve tailored this guide mostly to young first-time buyers, the advice given applies to anyone searching for a more affordable way to get on the road.

What is car finance?

Car finance is an accessible means of owning the car of your dreams. Instead of covering the full cost upfront, you can spread payments over several months or years in reasonable, bite-sized chunks.

A personal contract purchase (PCP) is a popular way of financing a car. Agreements often last between three to five years, and at the end you can either make a final payment to keep the vehicle, return it or use the resale value towards buying something brand-new.

You can also opt for Hire Purchase (HP) if you prefer the idea of owning the car at the end of the agreement without needing to pay a final lump sum payment.

To secure a finance agreement, you’ll have to pass a credit check and lender criteria and it helps to make a small deposit upfront (usually 10% of the car’s total cost).

How to improve your credit score

Before lenders consider your application, they’ll undertake a thorough credit check to assess your potential risk. The overall score determines who qualifies for a loan, the amount you can borrow, interest rates and credit limits. 

To ensure you’re in the best position possible, you’ll need some active credit history to show you can manage money responsibly (this is especially important for students without full-time employment). Below are three simple ways you can improve your score and bolster your chances of securing finance.

Check you’re on the electoral roll

Lenders check whether you’re on the electoral roll to protect themselves against fraud. If you’re a student, you can register at your home address or student address.

Apply for a credit card and use it sensibly

Using a credit card is the easiest way to show lenders you can keep track of your outgoings. However, if you’re worried about debt or have a low credit rating, a prepaid card is an alternative option, working similarly to a pay-as-you-go mobile capping your spending. Students may also be eligible for a student credit card with a low credit limit. 

Mobile phone contract 

If you’ve never had credit, a mobile phone contract is a simple way of improving your score. They work much the same as repaying car finance, albeit on a much smaller scale, demonstrating your ability to meet monthly repayments.

Four things to do before buying your first car on finance

Set your budget and plan for additional costs

The most crucial part of buying any car is setting a budget and sticking to it, no matter how tempting a set of shiny new wheels might be. So, before entering a finance agreement, prepare to meet monthly repayments by choosing a realistic model. If possible, negotiate an arrangement that suits your income stream.

However, it’s not just the initial value of the car you must consider – plan for running and maintenance costs too. These include:

Car insurance (often more expensive for new and young drivers)
Fuel costs, especially if you plan to travel frequently
MOT tests, scheduled maintenance and repair costs
Road tax (there are a few exemptions)

If you’re not sure how much you can borrow, read this handy guide.

Decide whether you want a used or new car

When it comes to buying your first car, a key consideration is whether you should buy new or used. While the decision is ultimately personal, depending on your budget and immediate needs, consider the benefits of both routes before making a final decision.

The advantages of a used car include affordability (the initial price is often between 30-50% less, meaning lower monthly repayments), cheaper insurance (a massive incentive for new drivers who are already facing premiums) and discounted tax.

However, there’s more choice when buying a new car and improved safety features, such as automatic emergency brakes, adaptive cruise control and intelligent sensor systems that reduce collisions. Surprisingly, new models are also quite affordable thanks to the range of generous finance deals on offer.

Find a guarantor

If you’re a student, you’re still eligible to buy a new car on finance. Although, without a full-time income, lenders may need additional reassurance that you can meet monthly repayments. In these cases, a guarantor will help bolster your application.

A guarantor is usually a close friend or relative, with a good credit history, who agrees to continue repayments if you’re unable to make them. While they can’t take on the loan (it will always be in your name), they act as a safety net to mitigate risk.

Entering into a Guarantor Loan is a big responsibility for both parties. It is therefore important that you both understand your obligations, as well as the potential risks.

Double check the agreement before signing

You know how the saying goes – it’s better to be safe than sorry. With that in mind, double-check the terms and conditions of your finance agreement to avoid hidden charges and dubious stipulations.

Things to watch out for include:

Mileage caps which restrict the amount you can travel each year (exceeding the limit incurs charges anywhere between 3p to 70p per mile)
Late payment policies which penalise you for missing repayments
Damage charges and service requirements
“Free” insurance policies that sound too good to be true

Do you need help finding a finance agreement?

Buying your first car is nerve-wracking at the best of times without worrying about hefty upfront costs, which is why we aim to make the process as straightforward and affordable as possible with the best finance deals anywhere in the UK.

To learn more, call us on 01246 458 810 or drop us an email at enquiries@mycarcredit.co.uk – one of our friendly specialists will be in touch shortly. For additional information, you can also visit our website where we have hundreds of helpful blogs and articles to browse through.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Car Finance: A Complete Guide

Balloon Payments Explained: What, Why & How

Will I Get Accepted for Car Finance?

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

buying first car car buying credit rating credit score first car Jan24

How Long Does Car Finance Approval Take?

checking how long car finance takes using apple watch

Your dream car is beaming on the screen in front of you. It has your name written all over it. Now that you’ve made the decision to buy your new car, the next thing you need is car finance. But how long does car finance approval take?

Read on to find out which factors affect how long it takes for a car finance application to be approval – and what you can do to speed things up.

Times are changing

Car finance approval has something of a reputation for being long and drawn out. That’s mostly down to the old-fashioned approach to car finance. Traditionally, you’d need stacks of paperwork, lengthy credit checks, back-and-forth communication and multiple submissions to financial institutions.

Nowadays, thanks to digital advances, car finance approval has become much easier and quicker. Buying a car and applying for credit online is as simple as clicking here and there, completing the online questionnaire and tapping on the final prompt to send the application.

That said, there are some ways you can make it quicker…

How can I get car finance approved faster?

While it’s difficult to estimate how long car finance takes to process or how many days are required to get your car loan approved, it’s helpful to know how you can speed things up from your side.

1. Budget

Whether you shop for your car first or wish to apply for car finance first, you still need to have an idea of what you can afford in terms of repayments. Use a car finance calculator to provide you with some rough calculations before you set off. Enter the loan amount, repayment period and try to get your bearings before you complete the application.

2. Credit rating

While we aim to help drivers with any credit rating, some small improvements can go a long way. Cancel out-of-date credit cards and complete the application as truthfully as you can. Check if your credit profile is linked to someone else or if there is any missing information on your credit report.

3. Documents

Online applications are much easier and faster than the old-fashioned way. But you’ll still need a few key documents along the way, including your driving licence, bank statements and proof of employment and earnings.

To save yourself time, try to get those documents ready before you apply for car finance. Scan them onto your computer and keep the physical copy on hand just in case.

Quick, hassle-free car finance approval

My Car Credit has taken every measure to eliminate the hassles of car finance approval and streamline the process for you. With more than 34 trusted car loan companies at our disposal, you can rest assured that we’ll be hunting for the best possible car finance deal available from our large panel of lenders.

Use our car finance calculator now to check how much you can borrow.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Long Does It Take To Get Car Finance Approved in the UK?

Is It Smart to Finance a Used Car?

How to Boost Your Credit Score in Your Mid-Twenties

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

approval car finance calculator credit rating Jan24 process

How to Boost Your Credit Score in Your Late-Twenties

By your late twenties, you’ve probably got into the swing of managing your financial responsibilities and might be looking to take on a mortgage, apply for a credit card loan or perhaps exploring your car finance options. Here’s our advice on boosting your credit score and moving to the next financial stage of your life.

Stop making hard inquiries

Hard inquiries with financial lenders are bad for your credit score, especially if your application is rejected. It’s always best to opt for a soft search approach as this does not leave a mark on your credit history. Before you get to the point of applying, it’s also a good idea to look into your credit history and credit score so you know what to expect from a financial deal from a lender.

Consider multiple accounts

When it comes to your finances, it’s always best to have two or more accounts open. This proves to a lender that you are financially responsible. There are a number of ways to do this depending on your financial circumstances (e.g. you can pay one set of bills from one account and run any day-to-day expenses through the other). It’s important to remember that this doesn’t mean spending more money but spending more evenly across multiple accounts.

Managing your utilisation

It’s simple, spread your payments across your accounts. There are a few financial sites that will recommend a strict utilisation percentage (usually between 15 and 30%). However, a good rule of thumb is simply to use each account evenly. Spreading your payments and costs onto a number of cards proves to your lenders that you know how to manage your money.

Keep old accounts open

A good amount of your credit score is determined by your credit history. So, whilst it might be satisfying to close an account as soon as it’s paid off, it’s actually better to keep it open in many cases.

Punctuality is key

This is something that cannot be stressed enough, no matter how old you are. Punctuality is one of the main things that financial lenders look for because it proves your ability to make repayments. Our advice is to get everything on Direct Debit so you’re never late with a payment.

Your late twenties are a time to get yourself financially stable. It’s time to shake off the old bad habits from your early twenties and begin to manage your money properly. Take our advice on board and you’ll be off to a flying start!

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

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How to Boost Your Credit Score in Your Mid-Twenties

When you reach your mid-twenties, your financial life really starts to go up a notch. This is usually the time when you receive your first considerable paycheck, apply for a credit card and begin to take full responsibility for your expenditure. An important part of this step is establishing and building your credit score. We take you through the ins and outs of how to boost your credit score.

What’s a credit score?

Your credit score is a three-digit number used by lenders to determine your eligibility for finance such as a car loan. It is made by taking into account your credit history, which is a record of how you’ve managed your lines of credit in the past – the most common for people in their twenties being an overdraft, credit card, mobile phone contract and/or utility bill.

Your credit score affects what type of finance products you can get, and what interest rate you end up paying. Those with a higher credit score, for example, are seen as being a lower risk to lenders and so are more likely to be accepted for finance on a lower interest rate.

What’s a good credit score in your twenties?

Credit scores range from 300 to 850 – the lower your number, the worse your credit rating is. There are different evaluations of what determines a good credit score. One of the main credit reference agencies, Experian, generally considers a score of 700 or above as good. Having a credit score that is this high in your twenties is very difficult to achieve, as often there have been fewer opportunities to prove your creditworthiness. At this time, the average credit score is usually hovering around the 630 mark, so anything higher than this is highly beneficial.

How to boost your credit score

When it comes to improving your credit score, there are three essential rules you have to follow: make all your payments on time, optimise the way you use your credit and don’t open too many lines of credit.

Making all your payments on time is the important part of building a good credit score and is the first thing lenders will look at when evaluating you for a car loan. If you have a bad history of paying your utility bills, paying your rent, or making contract repayments (e.g. paying excess charges on your phone contract), there’s no reason for a lender to trust that you will make your repayments on a car finance agreement.

Optimising the way that you use your credit essentially means being sensible with your money. It’s a vital part of improving your score as it proves that you are financially responsible. You may well make all your payments on time, but if you’re maxing out your card every month or stretching your overdraft to the absolute limits, this is a warning sign for lenders. They could argue that the additional money to pay back on a car finance agreement, would be one step too far.

Opening many lines of credit (especially over a short period of time) can look suspect to lenders and could indicate to them that you need extra revenues of money to support your lifestyle. So, whilst it’s ok to have a few lines of credit, it’s best to only have what you need.

Whilst it’s not good to have too many lines of credit, you can improve your credit score by opening a credit building credit card account. This a card with smaller amounts of money on it, which you can use as an example to lenders of you being financially responsible. However, if you don’t make your payment and use the credit on this card excessively, you will harm your credit score. This is only recommended for those people that are financially secure, disciplined with managing their budgets, and want an additional way to improve their credit score.

Building a good credit score in your twenties is no easy task – you’ve just begun your financial life and you might not have had enough financial responsibilities to establish a good credit score. Don’t panic, there will be plenty of time to prove your creditworthiness, and as long as you follow the rules outlined above, you’ll get there in no time!

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

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Everyday Hacks to Improve Your Credit Score

Whether you like it or not, your credit score is important. Want a credit card? Check your credit score. Want a mortgage? Check your credit score. Whatever way you look at it, your financial life is dictated by these three numbers. A good credit score is generally seen as being 670 or above. So, don’t sit around wasting time if you’re not there yet. Use our everyday hacks to improve your credit score.

Automate your payments

It’s simple – don’t miss your payments. You can make a standing order with your bank to make sure you’re prompt with payments. Alternatively, set a monthly reminder on your phone if you want to manually make payments.

Have a few lines of credit

When you have multiple open lines of credit – and they are being used correctly – credit agencies begin to take notice. It’s a sign of trustworthiness and organisation. Two or three is the sweet spot.

Use all your cards

Some people think the lower their credit card utilisation is, the better – they’re wrong. Using your credit card is a vital part of proving your responsibility to credit agencies. Don’t get yourself into debt making big payments, just make regular smaller payments – the kind of things you might normally make in cash or whack on your contactless debit card.

Balance out your cards

Make sure that your credit cards are levelled-off at all times. If you have one card that is looking a bit low, top it off with another one. Managing your credits by switching balance from one card to another shows financial maturity.

Pay off, don’t close off

Around 15% of your credit score is decided by the length of your credit history. If you close your old accounts you can shorten the time and affect your credit score. So, pay them off, don’t close them off.

Take out a credit builder card

If you haven’t had the opportunity to build up a credit score yet, or you’ve got a less than perfect score, take out a credit builder card. These are real tests: they have low credits and high interest rates, so manage this right and you’re onto a winner.

Piggyback on someone’s credit score

Adding yourself onto a credit account of someone with a good rating (with their permission!) is a great way of improving your credit score. It proves you are trustworthy with money. This is usually best to do with a partner or family member.

Up your credit limits

Don’t panic, we know this sounds crazy. This is actually a very effective way of lowering your credit utilisation and improving your credit score. Here’s how it works: you use £300 each month on your credit card but have a limit of £600, your credit utilisation is 50%. If you increase your credit limit to £900, your credit utilisation drops to 30%. Just don’t be tempted to splash out.

The three numbers that make up your credit score have a massive effect on your life, so it pays to improve it as much as possible. We’re sure that if you follow our credit score hacks, you’ll be on track to more approved financial applications, lower interest rates and a richer financial life.

In the meantime, rest assured that My Car Credit is on hand to help you with poor credit car finance – a successful application and maintained payments can even improve your credit score over time!

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

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How can I improve my credit score?

The better your credit rating is, the easier your car finance journey will be – you’ll be offered lower interest rates and have cheaper repayments to make each month. So, it’s worth aiming for an improved credit rating! For those that are having difficulty getting car finance because of a poor credit score, we’ve got eleven excellent tips to help you out.

Make sure you are on the electoral roll – Lenders check this to protect themselves against fraud and to check that you are who you say you are. You can find out how to register by visiting Your Vote Matters.
Cancel any out-of-date credit cards – Many people switch cards regularly but forget to cancel old agreements if they no longer use the card. These lines of credit will still appear on your credit file and can make lenders wary about the size of your debt – some may fear that you will ‘max out’ these cards and then struggle to make repayments.
Apply truthfully – Make sure that the information you provide on applications is accurate and truthful. Inconsistencies can have a negative effect on your credit score and could be considered fraudulent.
Don’t over-apply! – Too many applications, especially in a short space of time, can have a negative effect on your future score. This is a bit of a ‘catch–22’ as if you get rejected, or the rate you are offered is poor, you’ll want to keep applying to see if you can get a better deal, but at the same time your chances of being accepted will start reducing. For initial research, we offer a soft search application that doesn’t appear on your credit file.
Use a credit card to (re)build a history – Lenders want to see that you have a reputation of managing credit sensibly. Those with little credit history, even if none of it is bad, are often rejected because they’re difficult to predict. If you don’t have a (good) credit history, build one. The easy way is with any credit card – just spend a small amount each month on it (e.g. £60), and make sure you repay in full each month (preferably by Direct Debit).
Top up your credit card – As well as making sure that all your repayments are made on time by Direct Debit, pay manually on top of this each month. That way you guarantee that you’ll never be late with basic payments, and you’ll also have the flexibility to pay for any further financial responsibilities.
Update your credit report – If you have defaulted on credit or had a County Court Judgement (CCJ) against you, it will be recorded on your credit file. Even once debts are settled, some lenders may restrict who they lend to, especially if the CCJ has been given within the last 12 months. Therefore, it is important that as soon as your debts are settled, you make sure that your lenders inform the credit reference agencies and that your credit report is updated accordingly.
Apply for a guarantor loan – If you’re getting rejected for a car finance loan based on your individual credit score, see if you can be accepted for a guarantor loan. This kind of finance option allows you to improve your credit score as you go along, as (in theory) you should never miss repayments. You’ll need to have a close friend or family member with a good credit score that trusts you to make repayments but will financially support you where necessary.
Look carefully at the small print – Make sure that you look at all the information on your credit file to ensure it accurately reflects your current circumstances. Keep a watchful eye for any errors or evidence of charges caused by identity theft or fraud.
Check if you are linked to another person – Having a spouse, friend or family member’s credit rating linked to yours through a joint account could affect your personal rating if they have a poor score.
Include additional information – Where necessary, provide further information regarding any previous credit problems. If such problems occurred following identity fraud, redundancy or divorce, and your financial situation has improved since, you can add a note explaining this.

We hope this has given you a good insight into how to improve your credit score, but if you want any other information, you might be interested in visiting our related article:

How to check if you can get finance for a car without affecting your credit score

At My Car Credit, we are open to accepting applications from people with less than perfect credit scores. So, if you require further advice, please do not hesitate to contact one of our friendly My Car Credit Specialists – they will be more than happy to help and guide you the whole way through your car-buying 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

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