9am – 9pm 0116 366 6339

Have you ever wondered how lenders decide
which applications to accept and which to
decline? If so, you’re certainly not the only one!

How Lenders Decide to Approve Credit

UK Car Finance
28, May 2019

It’s natural to wonder what goes on behind the scenes, where the powers-that-be hold your financial future in their hands. Daunting and foreboding it may appear, but it’s actually surprisingly straightforward.

So to help shine light on this somewhat foggy matter, we’ve created a brief yet informative guide covering how lenders decide to give credit or otherwise.

Your Credit Score

As the name suggests, your credit score is indicated in a simple numerical figure. This alone is enough for many lenders to determine whether or not you’re eligible for financial support.

Almost every financial activity that takes place in everyday life impacts your credit score. When you demonstrate responsible financial habits, your credit score increases. When you miss payments, delay payments or attempt to live beyond your means, your credit score decreases.

The higher your credit score, the more likely you are to be accepted and gain access to the best deals on the market. Nevertheless, maintaining a sky-high credit score simply isn’t within the means of millions of everyday consumers.

However high or low your credit score, PoorCreditCarFinance.co.uk will do whatever it takes to find your perfect vehicle finance product from an extensive network of specialist lenders!

Your Credit History

A far more detailed record of your financial activities, your credit history provides a cross-section overview of your recent track record. Lenders are able to access your current credit history through one of the three primary credit reference agencies – Experian, Equifax and CallCredit.

In doing so, they can determine from the information available whether you’re a candidate for credit. If you have a history of borrowing more than you can afford to and failing to meet your repayment obligations, you’re unlikely to qualify. If your credit history paints a more agreeable picture, they may accept your application. When lenders examine the finer details of credit reports, they may determine eligibility by way of overall merit. Nevertheless, many simply see a less-than-perfect credit score as grounds for refusal, without considering the current financial circumstances of the applicant.

What Information Does a Credit Report Contain?

There’s a fair amount of information held about you behind the scenes, which sadly you can’t do a great deal about! Just a few examples of the entries your credit report may contain include the following:

Electoral Roll Entry

Details your entry to the electoral register and the address you used at the time of registration.

Public Records

If any county court judgments have been issued against your name or you’ve declared bankruptcy, this will appear on your credit report.

Account Information

Details regarding all existing bank accounts, credit cards and general lines of credit are presented.

Credit Agreements

Your payment history and track record with utility service providers, mortgage lenders, hire purchase agreements and so on will also be included.

Home Repossessions

Details of any previously owned properties that were subsequently repossessed.

Financial Associations

If you hold any joint accounts or credit facilities, these associations will be detailed and could affect your credit score.

Previous Searches

The vast majority of credit checks carried out in your name and their respective outcomes are recorded on your credit.

Previous Addresses

Information detailing your previous places of residence, if you haven’t lived in your current home for long.

Fraud Prevention

If you have fallen victim to fraud in the past, this will be indicated on your credit report to help protect you from future harm.

Improving your Credit Score

When dealing with a damaged credit report, it can be difficult to know where to start. Luckily, there’s plenty you can do to help steer things in the right direction.

Here at PoorCreditCarFinance.co.uk, we work exclusively with the UK’s most dynamic specialist lenders, providing accessible financial solutions for poor-credit applicants.

For more information or to discuss your requirements in more detail, contact a member of our customer support team today!
For an
instant decision
on car finance
Click Here

Ready to get the ball rolling?

Apply Now

Need advice or information?

Contact Us