Looking to finance your next vehicle? Before you begin your search there is one thing you need an understanding of: your credit score.
Your credit score plays a huge role in determining not only whether you’ll get approved but also what interest rate you’ll be offered. A better score could mean saving hundreds – if not thousands – over the lifetime of your vehicle finance agreement.
What is a Credit Score?
A credit score is a three-digit number that reflects your financial health and borrowing history. Your score typically ranges between 300 and 999, depending on the credit agency, The higher your score, the more ‘trustworthy’ lenders consider you.
Why Does Your Credit Score Matter for Vehicle Finance?
When you apply for vehicle finance, lenders check your credit score to determine two things:
- Can you afford the loan?
- How risky are you as a borrower?
A good credit score gives you access to:
- Lower interest rates, meaning cheaper monthly payments.
- Better deals with more financing options.
In contract, a low credit score could result in higher rates or difficulty getting approved.
How to Check Your Credit Score for Free
You can check your credit score for free without impacting it. Trusted platforms in the UK include:
- Experian
- Equifax via ClearScore
- TransUnion via Credit Karma
Checking your score regularly helps you stay informed and spot areas for improvement.
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