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20 May 2022

How to get approval on your next car finance

Top tips for increasing your chances of being approved for vehicle finance

As part of the dedicated and expert service provided by Club partners Oracle Finance, their senior underwriter has shared their best hints and tips to make sure you have the very best experience when financing your car or van.
 
1) Maintain healthy balances on your bank account
If possible, make your best effort to maintain healthy balances on your bank account.
 
Why? Because the lender may request copies of your statements to ensure that you can comfortably afford the instalment commitment.
 
Lenders don’t like to see the following types of transaction, all of which are seen as possible positions of stress:

  • Gambling transactions
  • Bounced direct debits due to lack of funds
  • Low credit balances
  • Balances in overdraft
 
What about savings?
Some individuals like to maintain a lean current account, transferring a lump sum into savings upon receiving their salary. Our recommendation is to retain these funds within your main current account for at least three months before applying for credit. If you don’t, it could appear that you won’t have clear funds for the proposed commitment that the direct debit will be drawn from.
 
2) Obtain a copy of your credit report
You may wish to request a copy of your credit report in advance of any new application. Your report will highlight any late or missing payments, defaults and CCJs that you may not be aware of and which could affect a lender’s decision. We would recommend obtaining a copy of your report three months in advance of your planned application, to allow enough time to address anything unexpected.
 
The credit report also shows areas of stress that lenders can see as a potential negative, for example:
  • Credit card balances up to or close to their credit limits
  • Current account balances in an overdrawn position
 
Your report will also show the number of recent hard credit searches, which can indicate difficulty obtaining credit. When working with Oracle, we will conduct an initial Experian soft search, that doesn’t leave a footprint on your search history, yet will highlight any issues.
 
The main credit reference agencies that lenders tend to use are Experian, Equifax and Transunion; they may charge a small fee for a copy of your report but it’s worth it if you’re unsure of your current status.
 
3) Be selective with hard credit searches
As mentioned above, a lot of hard searches in a short period of time (usually within 12 months), can have a detrimental affect on your credit score, which in turn may affect a lender’s decision.
The benefit of working with the team at Oracle Finance is that we will not send your credit proposal to several lenders hoping for an approval – we will carefully select the best option for you based on our expert knowledge and understanding of your circumstances.
 
We would caution against allowing car dealers or other brokers to send applications to several lenders as this may negatively impact your credit score.
 
4) Keep your electoral registration up to date
When obtaining a copy of your credit report if you don’t show on the electoral register, this can marginally reduce your credit score – so, again, give yourself the best chance of an approval by keeping your electoral registration updated.
 
5) Think about your deposit amount
Deposits on finance proposals are not generally compulsory on lower finance amounts, but on higher balances it may be a requirement. Finance Lenders will look more positively if a deposit is offered, as this will lower the Loan to Value (Equity Position), which in turn means that their finance risk in the car is not as great. More deposit can also have an effect of a higher score on the lender’s internal scorecard, this is separate to your personal Credit Reference Agency score
 
6) Keep your ID up to date
Following the submission of a finance proposal, the finance lender may require further supporting information to enable them to arrive at a decision.
 
Typically, this could be: 
  • ID proofs, such as a driving licence
  • Proof of address, such as utility bills
  • Your last 3 months salary fed bank statements
  • Proof of income or savings
  • A full copy of your last filed accounts if you are a company owner or up to date draft / management accounts
 
Obviously keeping your ID up to date means you won’t get caught out at this point. And if you are a company owner, make sure ensure your tax return and your company accounts are filed by the due date.
 
Ready to start your application?
Oracle Finance are the UK’s No.1 Funder for Prestige, Sports & Classic Cars. They specialise in funding prestige and high value vehicles, and their SAF qualified team of experts can fund vehicles from £25,000 through to multi-million-pound classics and supercars.

Their experienced and dedicated team will work closely with you through the process to deliver a quick and hassle-free experience.
 
To get a free, no-obligation quote or to discover your options, call Oracle on 0330 333 4592 or click here to complete a short online quote form.
 
Oracle Finance is a credit broker not a lender. They can introduce you to a number of different lenders who may be able to provide funding for your vehicle; they may receive commission for doing so. Oracle Asset Finance Ltd is authorised and regulated by the Financial Conduct Authority (Financial Services Register No. 662576) for the sale of consumer credit. For more information, please visit oraclefinance.co.uk.
 

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