Find out the credit score range for you to be able to get an approval when applying for car finincing in UK
The credit score, however, is still just a reference. It is not the only component that is taken into consideration when you apply for a loan. Your overall income and performance in the last 12 months on your credits and loans are also analyzed. If you have paid your credit payments on time in the last year and have maintained higher income, you will be able to score a good auto finance deal with the automobile company.
In some cases, if you have no late credit payments and have maintained a credit score over 700 or in some cases, over 750 you may be able to get zero auto finance through some of the car dealers that are offering the deal to the customers.
Explanation of credit score ranges in UK
Knowing what category you fall into when it comes to your credit score is essential, for you to know what to expect when applying for a loan or a credit card.
There are different explanations of credit score ranges in the UK that you need to know. They usually range from 0 to 999 and knowing what category you fall in is important. Here are some of the information that you need to know.
Very Poor
Very poor credit ranges from 0 to 560. People with this credit score will have a hard time getting approved because most lenders will think that they don't have the capabilities of repaying their credit.
Good to Excellent
Good to excellent credit score ranges from 721 to 999. They are the ones that can easily get approved when it comes to applying for loans and credit cards. They also get the lowest interest rates.
How are credit scores calculated in UK
A credit score ranges from 0 to 999 depending on the different models that are used by various credit bureaus or credit firms in the country. Higher the credit, higher is the probability of the person paying back the loan.
In England, like many other developed countries, some variables account for the credit score. These variables include the following:
First is your personal information. Secondly, the credit history of the person applying for the loan. The number of inquiries made for credit in the recent past is also considered when your credit score is determined. Your public records also play a significant role in the calculation of your credit score.
Whenever you apply for a loan, your credit score will be considered to evaluate the level of risk involved in lending you the loan.
Explanation of credit score ranges in UK
Knowing what category you fall into when it comes to your credit score is essential, for you to know what to expect when applying for a loan or a credit card.
There are different explanations of credit score ranges in the UK that you need to know. They usually range from 0 to 999 and knowing what category you fall in is important. Here are some of the information that you need to know.
Very Poor
Very poor credit ranges from 0 to 560. People with this credit score will have a hard time getting approved because most lenders will think that they don't have the capabilities of repaying their credit.
Good to Excellent
Good to excellent credit score ranges from 721 to 999. They are the ones that can easily get approved when it comes to applying for loans and credit cards. They also get the lowest interest rates.
Car financing options in UK based on credit score
There are different car financing options UK based on credit score by reading the information below.
Most car financing companies will depend on the credit score that you have when it comes to approving the loan that you need. Typically, no matter what your score is, from excellent to poor, your chances of getting approved is high because of the different options that most car financing companies have.
Credit Score Needed
credit score ranges from 300 to 990, and they are classified as poor, fair, good, very good, and excellent. People who have 680 and above have higher chances of getting approved instantly. For the ones below, the company might ask for additional requirements.
Low Credit Score
If you fall below the good category, you can still get approved, but the interest rate that might be given to you is high. Of course, you can still negotiate with the financing company if you think that it is too high.
Things you can do to improve your credit score UK
You may be denied credit in the UK if you have a low credit score, and when approved you are given a small amount with a high rate of interest. You need to take your time to manage and improve your credit score for better credit terms. Lenders prefer to work with borrowers with high credit scores because they have proved their financial prudence.
Make timely payments
Any late payment or default remains on your credit report for up to six years thus affecting your rating. Making timely payments puts you in good financial books and will forward a favorable report of you to credit agencies, which increases your rating. Whenever you encounter difficulties in making payment, inform your lender to give a grace period otherwise you risk damaging your credit score.
Register on the electoral roll
Your credit score can be boosted if you get registered on the Electoral Roll using your current address. Doing this would cut the delays when applying for credit since you are required to verify your residence. Some lenders can even deny you loans if they can't prove your residence.
Cut links with bad credit partners
You are connected financially to a partner whom you have a joint account with or take mortgage together. Their bad credit score could affect yours negatively. You should inform your credit agency when you dissociate with your financial partner, husband or wife. Failure to do this means that their financial undertakings keep impacting your credit score.