Have you been rejected for vehicle finance?
If you have had your heart set on purchasing a new car it can be incredibly frustrating to learn that you have been refused a vehicle finance loan. However, that doesn’t mean that you should give up entirely, the initial rejection does not mean that you cannot secure a vehicle loan at all. With that in mind here are some of the steps you can take to get that dream car even when finance is denied!
1. Find Out Why You Were Denied Vehicle Finance
One of the first steps to moving forward with your car purchase is discovering the reason why you were denied vehicle finance. Start by approaching the credit provider as they are obliged to reveal their reasons for turning you down. In the majority of cases, the rejection will be because they believe you to represent a risk to themselves based on your past credit history. However, if they tell you what the problem is it makes it easier for you to work on fixing it so you are more likely to be accepted for a car finance loan when you reapply.
2. Work on Improving Your Credit Score
As noted, the most common reason for being denied finance is a poor credit score. Get a copy of your credit report and look for any problems. First, look for mistakes as these can be removed if you can prove inaccuracy. Next, look at ways to improve your score. These include making sure that all payments are made on time, paying down some debts so they are not close to the credit limit, having different types of credit, show a steady employment history and close unused accounts. It is also important not to have several credit applications all at once as this can signal financial difficulty. If you have been refused finance for a vehicle, resist the temptation to apply elsewhere. Instead, take your time and look at how to improve your chances of being approved by working on your credit score.
3. Consider A Co-Signer for Vehicle Loans
If your credit score is particularly bad, you may have to accept the possibility that you are not going to be approved for car finance. Lenders will be reluctant to extend credit to individuals who represent a risk. However, it may be possible to have a friend or a family member co-sign your vehicle finance for you. This essentially means that they agree to pay your repayments should you fail to do so.