If you’re considering purchasing a vehicle on finance you should be aware of your credit profile, as this is what lenders and other agencies which offer credit will use to determine your credit worthiness and most importantly the rate of interest (APR) which you can loan the money at.
Your credit profile, credit score, or credit rating refers to a 3-digit number from 0-999 (based on Experian, other agencies vary) that is calculated using your financial history. This number - or rating - helps lenders decide how credit worthy you are i.e. how likely you are to repay your debts.
Put simply, a high score will get you a bigger loan with lower interest. A low score allows you to borrow less, at a higher interest rate. Below we have outlined what would be typically required to qualify for the different levels of interest (APR) when applying for car finance...
Excellent credit rating – Low APR starting from 4.9%
Credit score between 961-999
- Must be a UK Resident and have 3 years address history
- 22 Years or older
- Minimum net income of £1,000 per month
- Some existing credit in the last 2 years
- Traceable voters roll history
- No credit adversity
- Benefits Accepted
Good credit rating – Low to Medium APR starting from 9.9%
Credit score between 881-960
- Must be a UK resident and have 3 years address history
- 22 years or older
- Minimum net income of £1,000 per month
- Existing credit
- Traceable voters roll history
- A low degree of missed payments <3
- Benefits Accepted
Fair credit rating – Medium to High APR starting from 17.2%
Credit score between 561-880
- Must be a UK resident and have 3 years address history
- 22 years or older
- Minimum net income of £1,000 per month
- Traceable voters roll history
- Settled defaults accepted more than 3 years ago
- Benefits Accepted
Bad credit rating – High APR starting from 21.0%
Credit score below 560
- Must be a UK resident and have 3 years address history
- 22 years or older
- Minimum net income of £1,000 per month
- Recent credit adversity
- CCJs accepted
- Benefits Accepted
Please note: These credit scores are based on Experian’s ratings and could differ depending on which credit agency is used.
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