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Improve your credit score before arranging car finance

Introduction

Improving your credit score is always a good idea, especially if you are contemplating getting a new vehicle, when you will need it to be as robust as possible.

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What is your credit score?

Many people have only a hazy idea of what is involved in their credit score, and therefore what actions or omissions on their part might change it.

Your credit score looks back at your financial history and gives an indication to putative lenders of what your pattern of behaviour has been in the past. To achieve high scores, you need to build a history of being somebody who looks after their money, specifically their debt. The Money Advice Service has a helpful guide on how credit scores work.

What hurts your score?

Any missed payment will obviously damage your credit score, as will carrying large balances on credit cards for lengthy periods. Debt across a number of lenders will be aggregated by the credit score process, while applying for lots of credit in a short period can damage your record. Frequent house moves, especially if you are not on the electoral roll, will count negatively.

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How can you improve your score?

The most important thing is to be prompt with payments. If you are unfortunate enough to miss or be late with one, remedy this straight away, explaining to the lender and asking them to amend your record accordingly. Pay off credit card balances; if possible, leave cards without a continuing balance. You can even get credit cards that are designed to improve your score – the deal is that you make regular payments but do not spend on them, which provides evidence that you have unused credit available to you. Do not be in a hurry to get repaid debt taken off your record; provided it was paid within the agreed term, it is evidence that you can use and fully repay credit.

Leasing

Leasing provides another way of affording the best car for you. If you are looking at car leasing in Leicester, a vehicle management company such as http://leasing.totalmotion.co.uk/ is a good place to start.

In the future

Once you have successfully arranged finance for your new vehicle, ensure that you make the payments on time throughout the term of the deal.

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