Find out all the information that you need about getting a car financed with a low credit score in South Africa.
One of the biggest factors when it comes to getting a car loan is your credit score.
Applying for a car loan can be easy but if you have a low credit score, then applying for one can be challenging. Of course, the lending company will also look for other factors other than your credit score. These factors include your savings and if you have a job to support your expenses. Here are some information on how you can get a loan with a low credit score in South Africa.
Low Credit Score Car Finance South Africa
If you need a car finance with a low credit score then going to your credit union or bank is ideal. You can check the options that they have to offer for people who have a low credit score. You can ask multiple lending companies without damaging your credit score.
Thoroughly Prepare
Low credit score means that lending companies will probably be asking for a lot of supporting documents that can help prove that you can pay off the loan that you are requesting them. Giving the company a down payment can also speed up the process of approval.
Car financing options in South Africa based on credit score
Get to know the car financing options in South Africa based on credit score by reading the information below.
As you all know, financial institutions are using credit scores to distinguish individuals who are good and bad borrowers. If you are a good borrower, this means that you are known to pay all your loans back. If you are planning to get an auto loan, then understanding the different car financing options South Africa based on credit score is essential.
Wesbank
Wesbank accepts people with a good to excellent credit score when it comes to car financing. They may recognize individuals who have fair scores, but this will be subjected to additional financial requirements
Carfin Online Vehicle Finance
Carfin accepts people who have credit score of 675 and above, though they may give considerations to people who have no credit score or are below 675. They have the best consultants to get you the best deal available for you.
What is a credit score in South Africa
Get to know more about the credit score system in South Africa by reading the information below.
There are a lot of ways on how you can monitor your credit score in South Africa, for you to be able to know where you stand when applying for a loan or credit. Below are the two most trusted financial companies where you can monitor your credit score easily.
TransUnion
TransUnion offers different benefits for their members. This, of course, includes unlimited access to the credit score under the TransUnion. They also offer a 24-month view on your accounts, where you can change your payment habits.
Experian
Experian also offers different benefits, such as credit advice for its consumers and solutions on credit management. You can also monitor your credit score on their website, which is beneficial for you.
How are credit scores calculated in South Africa
In South Africa, the consumer as well as commercial credit information. This score is calculated by using various factors. Higher the score, lower is the risk of lending to the client. Most of the credit score models range from 300 to 1000.
One of the most important variable in calculating the credit score is your payment history. It shows whether you have paid your obligation on time or not. The total length of time that you have held credit also plays a significant role in your credit score. Another important variable that is used for calculating the credit score is the number of applications you have made for acquiring loans. It shows your need or desperation for a loan.
All of the variable mentioned above along with some other data from your credit report is gathered to give you a credit score.
Explanation of credit score ranges in South Africa
The credit score in South Africa is usually from 330 to 850. Get to know the explanation of credit score ranges by reading the information below.
Your credit score will highly depend on the history that you have when it comes to handling your finances. Some people tend to forget that knowing their credit score is essential, for them to get updated. Here are some of the information that you need to know about credit score.
Poor to Sub-Prime
A poor credit score ranges from 619 and below, while a sub-prime is from 620 to 679. Getting loans and applying for credit cards may be difficult because of the small credit score. Interest rates may be high as well with people with this credit score.
Good to Excellent
A good credit score ranges from 720 to 749, while an excellent one is 750 and above. Lenders easily grant loans to people with this credit score because they are considered as low risk.
How to improve your credit score in South Africa
A credit score is a numeric expression to measure your creditworthiness which eventually plays a significant role in borrowing cash or credit.
Following are some of the ways to keep up with and improve your credit score in South Africa.
First, you should make sure that you are paying your bills on time. Late payments affect your score negatively. Secondly, you should try your best to lower your overall debt with banks or any other financial institutions.
Another important factor that affects your credit score is the number of applications or inquiries made for a credit loan. Therefore, you should contain yourself from applying for loans needlessly.