Motorists should check their credit information before applying for new car finance
Equifax offers tips for new car buyers aiming to make the most of finance deals
According to the Finance & Leasing Association (FLA), finance for new car purchases grew by 15% in the first half of 2014. With manufacturers and dealers offering some competitive deals for the new 64 plate, new car buyers will want to make sure they can make the most of these offers. Leading credit information provider, Equifax, is therefore offering tips on the information that is used by lenders when assessing new car finance applications.
“Car finance companies access a range of information about an individual as part of a new car loan application”, explained Andrew Webb, Sales & Marketing Director, Equifax Personal Solutions. “As well as the information provided on an application form, this includes credit information. So it’s useful for anyone planning to make the most of the great new car finance deals currently available to have a good understanding of their own personal credit information.
“Lenders want to see that an applicant has kept up repayments on past and current agreements. They will also be interested in what other financial commitments they already have.
“We advise anyone applying for a new car finance deal to obtain a copy of their credit report. Doing this before heading into the showroom means they will be better prepared for any questions when the application is being processed. It also means they can avoid any delays in the loan being approved simply because some information on their credit file was not up to date. For example, electoral roll information is used by lenders to verify an applicant’s identity. If someone hasn’t registered on the electoral roll at their current address this could be an immediate hurdle to getting the keys to their shiny new car.”
The Equifax credit information check list
- Are you on the Electoral Roll? Lenders use this to verify your ID and combat fraud. Make sure you are on the electoral roll at your current address.
- Do you have a credit history? Building up a credit history will allow lenders to see that you have demonstrated responsibility in repaying debts. If you don’t have much credit history it’s worth opening a credit card account with your current bank.
- Are your bills paid? Settling debts, such as personal loans or hire purchase agreements in full demonstrates responsibility in repaying debts. Missed payments may make lenders think you’re already struggling with debt.
- Do you pay the minimum? Try to pay more than just the monthly minimum on credit agreements. This demonstrates your ability to repay debts.
- Have you got cards you’re not using? Lenders will often look at the total amount of unutilised credit available to an individual and consider this when making a lending decision. This could include looking at credit available to you in accounts you no longer use so it’s worth closing any that are dormant.
- Been refused credit? Stop applying for credit elsewhere. Each application logs a search on your credit file. Too many could appear as if you already have too many commitments.
“It is much easier to tackle any factors that might be affecting a person’s credit status before making new applications, rather than having to address them once the process has started”, concluded Andrew Webb. “We are, therefore, urging people planning to apply for new car finance to take a look at their credit information before they head to the car showroom.”
The Equifax Credit Report is accessible for 30 days free simply by logging onto www.equifax.co.uk/Products/credit/credit-score.html. If customers do not cancel before the end of the 30 Day Free Trial, the service will continue at £7.95 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.
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Equifax is a global leader in consumer, commercial and workforce information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 19 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100. For more information, please visit www.equifax.com.
Equifax Limited is authorised and regulated by the Financial Conduct Authority.