Equifax offers some timely tips to new car buyers to get ‘credit ready’
As new car buyers gear up for the 1st September plate, with many aiming to make the most of great credit deals, credit information provider, Equifax, is reminding them to think about their credit information. Last year, 2.48 million new cars were registered in the UK, with 75% of purchases using some form of finance*. And with motor manufacturers continuing to offer highly competitive rates for Personal Contract Purchases (PCP) on new cars, it’s important that anyone thinking of making the most of these offers ensures they are ‘credit ready’.
“When someone applies for a car loan the lender will consider the individual’s credit history in conjunction with their own lending criteria before they make a decision to provide the loan”, says Lisa Hardstaff, Credit Information Expert at Equifax. “It will also play a part in new car buyers securing the best rate for their circumstances. So it’s worth checking their credit information well in advance of heading to the car showroom”.
Car finance companies will assess a range of information about an individual as part of a new car loan application. In addition to the information provided on an application form, the company will perform a credit check. Lenders want to see that an applicant has kept up repayments on past and current agreements. They will also be interested in what other financial commitments they already have.
“We suggest that anyone planning to make the most of the new car finance deal obtain a copy of their credit report”, continued Lisa Hardstaff. “Doing this before heading into the showroom means they will be better prepared for any questions when the application is being processed. It also means they can avoid any delays in the loan being approved simply because some information on their credit file was not up to date. For example, electoral roll information is used by lenders to verify an applicant’s identity. If someone hasn’t registered on the electoral roll at their current address this could be an immediate hurdle to getting the keys to their shiny new car.”
The Equifax Credit Information Check List
1. Check your credit report
Apply for a copy of your credit report as much as 6 months before you start making new applications for credit. This will allow you to review your report to ensure it is accurate and up-to-date.
2. Do you have a credit history?
Lenders typically look at your credit history when making a decision on your application. If you already have a history of meeting your financial obligations, including repaying credit cards, loans or credit accounts and service contracts, lenders can use this to decide whether to approve your application. If you don’t have much credit history you could consider taking out small amounts of credit in order to demonstrate your ability to responsibly manage credit and repay debts. If you decide to do this, ensure the full balance is paid off each month to avoid being charged interest.
3. Are you registered?
The electoral roll is used by many companies for identity verification purposes in order to combat identity fraud. It is important, therefore, that you are registered on the electoral roll at your current address.
4. Correcting errors
If there’s a mistake on your credit report and it is in relation to a specific account, contact the lender or service company it relates to and ask for the error to be corrected. If you’re unsure which company to contact, you can contact the credit reference agency concerned and they can raise this with the lender or service company on your behalf. In most cases the correction will appear on your credit report within 28 days.
5. The right to explain
You can also add a ‘notice of correction’ to explain any items on your report, such as missed payments, which may have occurred due to life changes, such as losing your job. The ‘notice of correction’ will only be recorded with the Credit Reference Agency (CRA) you provide it to and will stay on your credit file indefinitely. The lender will see it when considering an application.
6. Individual Voluntary Arrangement (IVA) and County Court Judgments (CCJ)
If you are declared bankrupt or take out an IVA, it could impact your ability to gain access to credit during that period. If you’ve had a County Court Judgment and it is now settled make sure the settlement is recorded on your credit file. If not contact the court to get confirmation details and inform the credit reference agencies. Both these events will stay on your credit report for six years.
7. Managing existing credit agreements?
Try to pay more than just the monthly minimum on credit agreements and where possible keep credit balances low. Settle debts, such as personal loans or hire purchase agreements in full. This demonstrates your ability to repay debts. Missed payments may make lenders think you’re already struggling with debt.
8. Have you got cards you’re not using?
Lenders will often look at the total amount of unutilised credit available to an individual and consider this when making a lending decision.
9. Don’t apply for credit too regularly?
Avoid multiple applications in a short space of time. Each credit application logs a search on your credit file. Too many could appear as if you already have too many commitments.
The Equifax Credit Report is accessible for 30 days free simply by logging onto http://www.equifax.co.uk/Products/credit/credit-report.html. If customers do not cancel before the end of the 30 Day Free Trial, the service will continue at £9.95 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.
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*Source link: https://www.zuto.com/blog/new-year-new-car-how-to-prepare-yo...
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Equifax is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide. The company’s significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enable it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 19 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100. For more information, please visit www.equifax.com.
Equifax Limited is authorised and regulated by the Financial Conduct Authority.
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