FOR many self-employed workers or business owners, a commercial vehicle can be their lifeline.
If you’ve ever been refused car finance before and you have bad credit then you may think it’s impossible to get approved for van finance.
Many people find it hard to get approved for finance when they have bad credit but it doesn’t mean that it can’t be done.
Who can get van finance?
There are many finance lenders who have simple criteria. As long as you can say yes to the following, you could be offered finance:
-Been a UK resident for three or more years
-Are 18 or older
-Are able to prove you can afford van finance
-Are not bankrupt
-Have a full UK driving licence
Shop around
You can get van finance from most UK dealerships but also you can use online brokers too. If your credit score is very low, you may struggle to get approved by mainstream lenders at dealerships.
Many commercial bad credit car finance specialists also provide other types of vehicle finance as well. You can shop around for finance but make sure you stick to soft search applications only. Having multiple hard searches on your credit file can harm your score. If you are applying to many lenders, they will usually run a credit check on your credit file first.
Be able to prove your affordability
Being able to prove your affordability is really important when it comes to van finance. You can prove your affordability and income by supplying copies of your bank statements to a potential lender. They will usually ask for at least 3 months’ worth of bank statements.
If you are self-employed and receive cash in hand, then your bank statements may vary each month. If this is the case, you should consider putting any money you get into a UK bank account more regularly, this can increase your chances of getting approved.
Increase your credit score
If you are worried about getting declined for van finance with bad, you could consider increasing your credit score first before you start applying. There are a few ways in which you can easily increase your credit score.
- Pay all your bills on time
This one may sound obvious but if you’ve had trouble in the past sticking to a repayment schedule, then it’ll more than likely be the cause of your low credit score.
Even just a few months wort of evidence that you can pay your bills on time and in full can help to improve your credit score. It also indicates to lenders that you can be trusted to pay your finance on time and in full.
- Register on the electoral roll
Even if you don’t want to participate in voting in the UK, being on the electoral roll can help improve your credit score. It helps lenders quickly verify that you are who you say you are and also confirms your address history. - Check your credit file
When was the last time you checked your credit file? Knowing what’s changing on your credit file can be really insightful. You should also make sure all your information is accurate and up to date e.g. current living address.
You should also check your credit applications regularly to make sure you have not been the victim of a fraudulent application in your name. If you find any mistakes or anything that does not seem right, you can contact your credit referencing agency who provided your credit file.
Sever ties with any bad financial links
When you take out credit with someone else, you will automatically become financially linked. If you no longer have any active credit with someone who may have bad credit, then its best to disassociate yourself.
In many cases, their bad credit score could be harming yours. Again, if you would like to make a change to your credit file, you should contact your credit referencing agency.
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