Bad Credit Car Finance Explained
With solid planning and a strong application, your bad credit car loan can succeed. Reputable lenders look for evidence to justify lending you the required funds. Unfortunately, however, some applicants who could be successful simply are not because they fail to demonstrate that they meet lenders’ strict approval criteria.
Reliable income is critical. Lenders realize that without income, nobody can service debt, so they look for current employment and employment history. A solid employment history – several years of continuous or near-continuous employment – is critical to demonstrating you will be a good finance risk. In your current job, you need to be past the probationary period (if full-time or part-time). If you’re a casual employee, a 12-month (or longer) track record with your current employer will be required.
Lenders will assess your finances using your bank statements – for savings accounts, credit cards and loans. Kyle Rhys from www.badcreditcarloan.com.au says it’s important to manage your finances prudently if you want your application to be successful. “You need to spend less than you earn,” he says. “Don’t over-spend. Lenders don’t like to see over-drawn accounts because they demonstrate your expenditure is greater than your income. You need to be careful that regular payments you might have set up don’t over-draw your account”.
Kyle Rhys also advises applicants to ensure debts – such as credit cards and loans – are carefully managed. “Don’t miss any payments,” he advises. “Missed payments are evidence of debt mismanagement, which raises red flags in the minds of lenders about whether you have the capacity to service additional debt”.
Never lie in, or omit relevant facts from, your application. Your application is checked against your financial records, and discrepancies there serve to destroy whatever confidence the lender is beginning to build up in you as a potential loan client.
Get a copy of your credit file and check all the entries in it. If you think an error has been made, contact the organization listed against that entry. There is more information on your credit file at www.veda.com.au.
An expert financial adviser can help you structure your application so that it demonstrates that you meet the critical criteria the lender needs in order to approve your application. Kyle Rhys says it’s a shame when good applicants fail to demonstrate that they measure up. “Lenders actually want to lend you the funds,” he says. “Unfortunately they are allowed to do that only if they can put a tick in every required box. A lot of our work involves doing exactly that”.