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How to improve your credit score

Improving your credit score to get car finance

A strong credit score is a key element in getting car finance. Lenders look out for a good credit rating as it is evidence that you are financially reliable. A high credit score indicate to lenders that you’re less risky.

Whether you’ve got a good or bad credit rating, there are always ways to improve or maintain it.

Our Tips for improving your credit score:

What finance options are available to you?

Use your overdraft sparingly

Try to avoid using your overdraft or not frequently. Overdrafts appear on your credit report as debt

Prove to lenders that you are reliable by staying within the agreed limit and you can clear it on time each month.

Keep credit applications to a minimum

Try to avoid applying for credit frequently in short spaces of time. It makes lenders think you rely too much on credit.

This only applies to “Hard searches“ but not a soft credit check.

Avoid payday loans

Steer clear of payday/short-term loans if possible.

They can be tempting during financial emergencies but are expensive and some mortgage underwriters reject people who have taken one.

Settle any credit disputes

A default is when you should have made a payment and didn’t. If you think the default is incorrect, it can be disputed. Check if the default shows up on the other credit reference agency reports.

Financially delink

If you separate from someone you had joint finances with, you don’t want their credit history to affect yours in the future.

Contact credit agencies and ask for a notice of disassociation. Close any joint accounts and pay off joint loans.

Check your credit report annually

Familiarise yourself with your credit report once a year or before any applications.

They contain a lot of data on you but there could be errors. You will want to be aware of any issues and have chance to correct them before applying.

How long does it take to improve your credit score?

This can all depend on your personal finance situation and how low your credit score is to begin with. If in the past you have had financial difficulty that has massively harmed your credit score it can take years to rebuild. However if you have only slightly harmed your score such as missing only one credit card repayment. It could only take a few months to get your score back to being good.

What is the best credit card to improve your credit score in the UK?

Credit repair cards can help rebuild your profile if you keep up with the repayments and typically come with a low credit limit to ensure you don’t overspend they also aren’t off-limits to those with lower credit scores.

Why should I improve my credit score?

Improving your credit score is the most effective way of increasing your chances of being accepted for car finance.

Does applying for a car loan affect my credit score?

If a 'soft search' is done this won't affect your credit rating – this search simply tells us your score. When you confirm you'd like to proceed with car finance there will be a 'hard search', which gives lenders more details, this is then recorded on your file.

What credit score do I need for car finance?

Often lenders look for a good credit score however at Swansway we may be able to help you have you have a lower or poor credit score.

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