How will car finance affect my credit score
If you are looking into car finance, you may be wondering if, and how, it can affect your credit score. Here is everything you need to know.
First of all, let's talk about credit scores. A credit score or credit rating is calculated based on your financial decisions and background. Things like your previous experiences with money and borrowing make up your credit rating. There are ways you can boost this and also things which may lower it too.
So, when would car finance affect your credit score?
The first way it can affect it, is when you make multiple applications. If you do this over a short space of time, it flags up on your credit rating and can alert potential lenders. While we may know you are just shopping around for a good deal, it doesn't show up like that on your rating. It is best to avoid making multiple applications in a short space of time.
Another negative way it can affect your credit rating is if you miss your payments. If you take out an agreement and fail to pay, there are a number of implications and one of those is it hindering your chance to get credit again, not just for car finance. The best thing to do here is to make sure you will be able to carry through with the payments before you commit.
On the flip side of that, car finance can boost your credit rating slightly, if you pay on time over a number of years. This builds your credit profile and you can see those numbers start to creep up in some cases.
Car finance is something which needs to be thought through and considered carefully, so if that is where you're at and you're looking for car finance in Barnsley, speak to a member of the team at Credit Car Now, part of Autozone UK.