Without looking at the specifics of your credit history and car finance application, it’s impossible to say why you’ve been turned down. There are many potential reasons and some of them are perhaps more nebulous than you’d imagine.
Here we’ll try and clarify some of the issues as they arise in response to frequently asked questions on the subject.
In these circumstances, you may have been turned down due to one of the following:
If you’re thinking that’s not their concern, they will see it differently! They’ll be worried about how much they might be able to get for the vehicle if they have to reclaim it from you and then sell it in the event of you defaulting on the loan;
There are, in fact, many other issues that could lead to the refusal of your car loan application which might not be related or directly linked to a ‘bad debt history’ as such.
A lot depends upon the policies and risk evaluation criteria of the lender you’ve approached and applied to. Some companies simply see things differently to others.
Remember too that the lender will typically be looking at the totality of your credit history and CCJs are only a part of that.
You can’t — at least not ‘quickly’.
Certain problems on your history files will work their way off your records over time. You can also ask for credit history information providers to put explanatory notes on your files in certain circumstances.
You may be able to, in effect, ‘dilute’ some of the challenges on your files by successfully applying for and then repaying correctly, another loan. That’s something positive for potential lenders in future to see and that might help offset some of the negatives.
Be exceptionally cautious of companies who offer chargeable services claiming to be able to ‘clean up’ your credit history files.
Generalisation is risky but lenders typically may not be too worried about, for example, evidence of a couple of late payments on your credit card. By contrast, as you might expect, loan defaults and CCJs will be more concerning to them.
More correctly, the advice is typically along the lines of not applying for lots of individual loans at a time when your credit history means that you’ll struggle to find one.
That’s because when they’re refused a loan, some people revert to a ‘shotgun scatter’ approach to their applications. They send lots and lots out there hoping that they’ll get a favourable reception with at least one.
Unfortunately, every time you apply for a loan and are refused, that is recorded on your credit history files too. So, having lots of refusals on your records may be alarming to other potential lenders.View more from The Car Finance Hub