If you are planning to purchase a car on finance anytime soon, and if you happen to have a poor credit rating, then you may be concerned as to how this could impact any purchases that you are looking to make, as well as potentially limiting the options available to you. Today, we will take a look into what the situation would be for anyone looking to purchase a vehicle on a finance plan albeit with a bad credit score.
First of all, you have to be realistic about the fact that, ultimately, there will be fewer options on the table because of a negative recent credit history. Regardless of the reasons for this, you have to accept that there won’t be as many opportunities for finance deals once the dealership recognises that you have a poor credit score, and the same applies to a bank or a building society should you be looking for a Personal Loan (PL) plan. Once you come to that realisation, it becomes easier to forge ahead, especially if you remember that you may have a bad credit score now, but that doesn’t have to be the case forever.
On that note, it is worth being as honest as you can be with the dealer when discussing your credit score. They will appreciate you being frank about the topic rather than hiding it or falsifying the reason for your credit rating being low. As with insurance, the short-term impact will be off-set by the increased long-term trust that being open and honest will create. That being said, if your credit score genuinely has been impacted by something external, such as a redundancy in a previous job, you can be honest about that too, and it could be that despite your credit rating, you will have increased options on potential finance deals.
The last thing to remember is that, with a low credit score, you have to manage your budget more efficiently. That means going for a car that does the job, is affordable, and has a fair and feasible payment plan. It does not mean trying to go for a highly expensive vehicle with a shorter period of time to complete payments that will only put you in a bigger financial hole. If you recognise the reasons for you having poor credit and you learn that the responsibility happened to lie with you, then it will not help to make that problem worse. Be realistic, be sensible, and go for something that will be suitable for you today and for the next couple of years, with the view of potentially upgrading further down the line once your credit score and general financial situation have improved.