Hiring a Car with Bad Credit
Hiring a car for people with bad credit can be quite a tricky affair and result in considerable distress. So, what exactly constitutes bad credit? Whenever you apply for various kinds of lease or finance agreements in the U.K., a team of underwriters are assigned the task of assessing your creditworthiness.
These underwriters in most cases do not know you personally, or the circumstances that could have resulted in your bad credit rating; so what they do is conduct a credit search with various credit reference agencies across the country. These credit references have records of all finance agreements you have ever entered into and a summary of your personal details, including:
- Account balances
- CCJs
- Defaulted accounts
- Bankruptcies
- Aliases
- Voluntary Arrangements including unofficial arrangements and IVAs
- Various addresses you have registered at
The reference agency gives the underwriters a credit report that’s usually a score out of 1,000. Many financial institutions have their benchmark score that they use to either accept or decline your request according to your credit rating. In some cases, the process is not so straightforward, since the underwriter may still consider other factors, such as your current financial agreements and other factors.
Hiring a Car with a Bad Credit History
If you have a not-so-great credit history, you need to find an underwriter who is willing to consider your present condition and not just your past. As a rule of thumb, the underwriter will try to assess the following:
- Can you afford the agreement? Even though nobody can accurately predict the future, it’s foolhardy to enter into a credit arrangement when you clearly know you can barely afford it. A good underwriter will make a careful assessment of your current financial condition when deciding whether to approve your request.
- The underwriter will check whether you have been able to regain control of your finances. For instance, if your debt situation is getting progressively worse, chances of your request being turned down are high.
- Can you be easily traced? Most bad credit companies will turn down your offer if you are vague about your home address or are simply not honest with them.
In many cases, you will find that companies that deal with people with bad credit histories are far more accommodating than financial institutions such as banks. Some even have acceptance rates over 90%, meaning at least 9 out of 10 people have their credit requests approved regardless of their past defaults, CCJs and bankruptcies.
If you are not in any particular hurry to buy a new car, you can delay buying it for some months and take this time to improve your credit rating. Paying off your bills promptly is a great way to do this.
Alternatively, you can consider a lease takeover. This is a situation whereby the car buyer (you in this case) take over the car of someone who has bought a new car but can no longer afford to continue with the payments. Lease companies are usually generally less strict about the credit rating of the buyer in such cases.
Armed with the right information, there really is no reason to despair when you need to hire a car but have been slapped with a bad credit rating. You can still manage to get credit to buy the car you need by contacting the right bad credit company.
Gatwick Car and Van Rental are the leading providers of car hire services in the region, with prices starting from just £16. Get in touch today to find out more.