What Checks Are Done For Car Finance?

These checks may include the following:

Credit check

The lender will obtain your credit report to review your credit history, credit score, and any outstanding debts or missed payments. This will give them an idea of your ability to manage debt and repay loans.

This information can impact your chances of being approved for finance and the interest rates that you are offered, which is why it is so beneficial to have a good credit rating. There are two types of credit checks: soft and hard.

Soft credit checks

Soft credit checks are used to gain a general idea of your credit history and assess your ability to manage loan repayments. These checks only access basic information and do not offer an in-depth look.

They are useful for obtaining an agreement in principle and do not leave any marks on your credit report, which is useful as too many hard credit checks can harm your credit score.

Hard credit checks

On the other hand, hard credit checks provide a comprehensive overview of your credit history. These checks are carried out once you have reached an initial agreement with the finance company and have found a suitable deal.

However, too many hard credit checks can be damaging and are not attractive to lenders. It may indicate poor money management skills and result in the rejection of your finance application. Therefore, it is essential to make sure you are satisfied with the deal before a hard credit check is performed.

When you apply for car finance with Autozone/Car Credit Now, we will provide you with quotes from our lenders before any hard credit searches are conducted, so you won’t need to worry about it affecting your credit score.

Income verification

You will typically be asked for proof of your income, such as wage slips or bank statements, to ensure that you have a reliable source of income to make repayments.

Employment history

Your employment history may also be checked to determine your job stability and the likelihood of continued income.

Affordability assessment

The lender will assess whether the loan repayments are affordable for you by looking at your income and expenses, including any other debts or financial commitments you may have.

Identity verification

The lender will also need to verify your identity to ensure that you are who you say you are.

Overall, the checks carried out by the lender aim to ensure that you are a suitable candidate for car finance and that you are able to repay the loan without causing financial difficulties for yourself.

If you are worried about a poor credit score resulting in refusal for car finance, speak to Autozone/Car Credit Now. We specialise in bad credit car finance, and as long as you can prove that you are able to repay your vehicle loan, you will have a great chance of being accepted with us!

More Info: What is the approval process for car finance?