What Can I Do if I’ve Been Declined Car Finance?
I’ve Been Declined Car Finance, What Can I Do?
Being rejected for any sort of financial product is always disheartening, and if you’re not aware of your credit rating it can be a shock.
If you were applying for a loan that you really needed, for example a car loan to allow you to buy transport to work, it might cause you to panic. As well as the concerns about what you will do for transport, you have the negative feelings that can come with a rejection. We all want to manage money well, so a rejection can make you feel like a failure.
However, you should not despair. The first thing you need to do is understand what lenders are looking for and why you were declined. This will probably make you feel better about the situation as you might realise it was a small detail that caused them to not approve you, and it will also put you in a good position to sort the problem out and reapply.
Finding Out Why
If you went through a broker for your car loan then they should spend time explaining to you why you were declined. A reputable broker will always ask pre-qualifying questions and find out a lot about you to reduce the chances of you applying and being declined. If they tell you at the start that they won’t be able to help you, they should explain why but if they don’t then ask. Lenders have criteria which you might not be aware of, such as requiring you to have not moved more than 3 times in 3 years. If you’ve applied fully and still been declined a car loan again the most important thing is to ask why.
Preparing to Reapply for a Car Loan
Once you know what the problem is you can work out whether it is something that can be fixed in the short term, or if it is a long term goal. It might be something largely out of your control, like your income. If this is the case, do you know anyone (a partner or family member) on a higher income who could act as a guarantor or take the loan for you?
One of the most common reasons for being declined car finance is that you have something negative on your credit report. Missed payments, high debt or an unstable past can all produce a negative score. It is important that you rectify these problems before trying to apply for a loan again. If the missed payments were a while ago, just keep on top of your finances and make sure you pay all your bills each month and over time your score will improve. If you have a debt such as a credit card try to pay as much off as you can.
Registering to vote and staying at your current address for a decent amount of time will also help lenders to view you more positively, as will saving up a deposit.