In today’s modern world, owning a car is a necessity rather than a luxury. Even in developed countries, there are plenty of places where public transport is mediocre at best.
For example, I once lived in a village where there was just one bus service that ran three times a day in either direction! Walking to the nearest major town or city wasn’t viable, and cycling there was bordering on insane! It was by a busy main road, in case you were wondering!
Even in well-provisioned areas, owning a car offers greater convenience. Especially for those with young families in tow. It’s not much fun trying to get onto a crowded bus or train when you’ve got a pushchair, baby and other young children with you!
There are plenty of cars on the used car market that are affordable for people with different budgets. A lot of folks borrow the money to buy a car as they don’t have access to available cash in large quantities.
But what if you are one of those people, and are finding it tough to get a car loan? Each person has something called a “credit record.” Information held by firms called credit reference agencies help lenders decide if you are a good credit risk or not.
Whenever you apply for a loan, credit card or some other finance, the fact that you applied for credit will get recorded. And if you get approved for credit, details of your borrowing get logged and updated on a monthly basis.
If you start to fall behind on your payments, this information will also get logged against your credit file. Fall behind too often and mainstream lenders will avoid you like the plague if you ask them for money.
So, if you want to buy a used car, what can you do in these circumstances? It turns out that there are plenty of things that you can do to improve your credit record. Here is what you need to know:
Get a copy of your credit record
The first thing to do is to find out what state of health your credit record is in. I recommend contacting the major credit reference agencies, such as Equifax, to get a copy. It is your legal right to learn what’s on your credit record.
If there are any errors, you can put plans in place to get those errors fixed. Some folks get refused for credit because of incorrect information rather than irresponsible borrowing.
Save up some cash
The best thing to do is to buy your car with cash. All car dealers, such as Sandles car supermarket, accept cash payments for the cars they sell. But if the car you want is a high-value vehicle, it might not be practical for you to save up the cash.
Don’t apply for too many loans
Every time you apply for credit, your application gets logged as you know. But if you apply for several loans in a short period, it will cause your credit record to get red flagged. In other words, lenders will avoid you because they think you are making fraudulent applications!
Space your applications out and don’t apply for more than three loans a month.
Have you got any tips you’d like to share? Post them up below!