If you have been struggling with your credit history in the past, you may be concerned that you are not eligible for our car leasing deals. Check out our helpful guide below which explains vehicle finance, car leasing with bad credit and what may affect your eligibility for car leasing.
When you are looking to get a car leasing deal, you will have to apply for vehicle finance. This means that the finance companies will check your credit history before deciding whether to accept your car lease application. A credit check looks at your current financial circumstances, your credit strength and risk status. Funders use your credit history to determine your reliability in making payments and whether you can be trusted to pay for your car lease throughout your contract period.
A credit check can take up to 72 hours to get back to us with an answer; sometimes additional proofs may be required which can extend that time.
To access your credit file and determine your eligibility for a car lease, finance companies will approach at least one of these three UK credit reference agencies: Equifax, Experian or TransUnion. Each credit agency has their own scoring model so we can’t exactly tell you what score you need to pass but normally they place your credit score into a scale that ranges from “very poor” to “excellent”.
Most funders tend to ask for a “good” to “excellent” credit score in order to accept an application for vehicle finance. However, we should point out that a funder uses more than just your credit score to determine whether to approve or decline your application.
Finance companies look over your car lease application to identify any financial behaviour that is abnormal or worrying. The list below illustrates some of the red flags that funders look for:
You will need to ensure the value of the rental you are applying for is affordable; you should be looking at how much money you have coming into your account and comparing it with your outgoing payments (like credit cards, mortgages, loans and childcare costs) to determine your disposable income. You will need to leave yourself with enough income to cover your outgoings and still have a disposable income that covers your rental comfortably.
Overdue payments can indicate that you are struggling to keep up with and manage your finances. Missing payments can remain on your credit check for up to six years; lowering your credit score. Some finance companies also take note of any payment holidays taken during the Covid period as these can sometimes be noted as missing or overdue payments. Always double check before applying for finance.
If you have had to apply for bankruptcy or have had a County Court Judgement issued against you, you probably have had marks noted down on your credit record and be harmful to your credit score. Funders will take note of any bankruptcies, insolvencies or CCJs on your credit check.
Applying for credit leaves behind an impression on your history and if you have a lot of searches across a short period of time, it can indicate that you are desperate for credit or are finding it difficult to pay your bills.
Reaching your credit limit by either using your entire overdraft or maxing out your credit can lead to finance companies believing you are in financial difficulty. They also determine that you have difficulty if you have multiple loans, inconsistent repayment history or any unpaid debts.
Get in touch with our team of leasing consultants on 0345 350 3776 and we will be able to help you determine whether you have a good chance at leasing your next car. If you think you will have any problems with credit, our team can also help you explore different options so we can get you behind the wheel of a brand new car.