Have a Bad Credit Score? Reasons Why and How to Improve it.
Lots of people these days find themselves with a bad credit scores.
Your credit score is a vital part of your life as this will determine how successful you will be when applying for affordable finance, if you have a bad credit score you will find yourself being declined by mainstream. Lenders will look at your credit score before anything else and if it is not up to scratch you will find yourself being declined, and if you are declined this will impact even further on your existing credit score.
There are a few credit reference agencies out there but the main ones are Experian and Equifax each one will probably have a different credit score for you, for example if you have good credit with one you may fall into poor credit with the other. Each time you apply for finance from a lender that lender will then allocate you a score.
How do I check my credit score?
It’s a good idea to get your credit score checked and both Experian and Equifax offer various ways to do this all of which you will need to pay for (although they do offer free trials), but note that you have a legal right to check your credit score report and this will cost approximately £2 (when this blog was published).
Checking your credit score with the above agencies will allow you to see where you fall into bad, poor, good or excellent, this will give you an idea of how likely you will be accepted by finance companies in the mainstream. If you check your credit score before applying then you will know if you are risking your credit score further, as each application you are declined can have a negative effect also.
By monitoring your credit score you can keep an eye on your progress and take further action to improve it, for more information on how to improve your credit score see money experts website.
A bad credit scores can be detrimental to your financial future.
Having a bad credit score can impact on your financial future in many ways, many of us rely on credit to get the majority of our purchases the biggest ones being taking out a mortgage, getting a car and using credit cards and taking out loans to get the things we want.
Every time you apply for any kind of finance and you are declined it puts another black mark against your credit profile, which in turn means your credit score will become worse.
There are companies who are focused on sub prime lending, including CVS Ltd for bad credit car leasing, unfortunately if you have a bad credit score you will have to pay slightly higher than mainstream. If you are taking out a loan or credit card your rates will be higher.
At CVS Ltd we try to keep our leasing agreement payments as low as possible, but we will be beaten by mainstream leasing companies. However at CVS Ltd we treat each application process individually and therefore are able to create a leasing agreement which is affordable to the customer, unfortunately other sub prime companies are much larger with certain protocols are in place and are not as flexible.
Even if you are not thinking of taking out finance at this moment it is definitely worth checking your score now, and begin to take action to improve it. Then when you do come to take out finance you will be able to with mainstream, getting lower rates, and better deals. This may be time consuming but will be well worth the effort in the end.
If you are specifically looking to get a new car and cannot afford to purchase a new one then it is worth looking at leasing. You can take out a lease for 2 or 3 years, and at the end of the lease you can either hand the car back and walk away or, like a majority of our customers, lease another one.
Please note by leasing a car with CVS Ltd, this will not have an effect on improving your credit score, however we are happy to write you a reference at the end of your agreement should you require one.