If you want to buy a car, you may have realized that:
>> You have some bad credit as a result of some issues in the past that are listed in your credit file; and
>> Your local bank branch has determined that you are not eligible for a car loan.
Do not worry. You are still eligible for a car loan because lenders / credit providers do provide second chance to people with bad credit. However, you will need to:
>> Show the lender / credit provider that you have improved your credit history; and
>> Have a reasonable explanation for any defaults listed in your credit file.
When you have bad credit, you need to put in extra efforts and ensure the lender / credit provider of regular payments. Here are five important tips that you should consider and which may benefit you:
1. Take the Time to Clean Up Your Credit File
This is the most obvious tip, which you can do on your own before applying for a car finance. Following are a few ways of cleaning up your credit file:
If you have any issues on your file that can be paid, you should pay them off as quickly as you can.
>> If you have any bad credit listings that you are disputing with a creditor, you should address these issues as quickly as possible and try to come to some resolution with the creditor.
>> If you cannot come to a final resolution, you should get some assistance from an intermediary that can mediate for you such as the industry ombudsman or a solicitor.
2. Provide a Reasonable Explanation of any Adverse Credit History
If you have any adverse credit history listed in your file, the lenders / credit providers will require you to provide a reasonable explanation as to why you obtained the adverse credit history, and they will need to be satisfied with your explanation.
3. Speak to a Qualified Professional
It is wise to speak to a professionally qualified finance broker as he / she:
>> Deals with a number of lenders / credit providers on a regular daily basis, and he / she should know the credit policy requirements and guidelines of each and every lender / credit provider;
>> Can advise you of the "steps" you can take to rectify your credit history, and also the "time frames" required to be undertaken by you; and
>> Can advise you and show you ways of demonstrating your stable financial condition to the lender / credit provider.
4. Wait for Your Bad Credit to be Automatically Removed from Your Credit File
When you have paid and settled any outstanding / unpaid matters appearing on your credit file, they will drop off your credit file automatically. You may consider applying for a car loan after they are removed from your credit file.
5. Be Careful and Don't Apply for too many Loans
Remember, you should only place credit inquiries on your …