How will car credit affect my credit score?

Car finance is something that can make owning a car more accessible to more people, and we have helped thousands of customers into their dream car by taking out a finance agreement. However, there are certain things to consider before you sign on that dotted line, or online, so make sure you have carefully considered all elements.

Your credit score is one of them. Let’s start with the application process.

When you apply for car finance, a hard search will be conducted on your credit file, so the lender can build a picture of you and see what you are like with finance and credit. Every time a hard search is conducted, this is noted on your credit file and if you have a series of hard searches in a short space of time, that will negatively impact your rating. The way to avoid this is to minimise hard searches and spread them out throughout the year. You can always look at soft searches initially to see what your chances of approval are.

Onto the car finance. Whether or not car finance will affect your credit rating totally depends on you as a customer. If you keep on top of your repayments, there will be little impact o your credit rating and in some cases, it can even increase your credit score, but this totally depends on you, your circumstances and your agreement. However, if you fail to keep up with payments, you are late or you miss them completely, this can have a negative impact on your credit rating, so it is something you need to keep in mind.

If you have any questions around car finance, please get in touch. If you would like to apply for car finance, click here and start your journey.