Credit Concerns? How to get credit-record-ready for vehicle finance

Credit Concerns?
How to get credit-record-ready for vehicle finance

So you’ve had some problems in the past – maybe a relationship break up, business failure, or you were over-committed. While bad credit can impair your ability to obtain car finance, depending on the circumstances, and the way you can demonstrate your money management now, you still have some options.

To increase your chances of a yes, even with a bad credit history, check out these tips.

Make sure any defaults are paid. While defaults and collections stay on your credit record for five years, the default listing also shows whether or not the debt has been paid. Even if you weren’t in a position then to make a full or partial repayment, make sure you repay any outstanding balance, and that the listing is updated to show as paid, to demonstrate you have intent to repay a loan.

Pay your utility bills on time. Many credit agencies are now offering “positive credit reporting” – which means that you get recognised for meeting your commitments on time. So, even if you do have a bad credit history, by meeting your current commitments on time, you can demonstrate that you now have some good money management practices in place. Basically, you get credit for being a good payer, rather than just being penalised for past mistakes.

Make sure you have good account conduct. Un-arranged overdrafts or failed transactions due to insufficient funds makes it look like you are bad at managing your money (for example, not aligning up your pay dates with regular payments) or are forgetful, and don’t always make your payments on time. The two most important considerations when someone is assessing your loan application are “can you afford the loan?” and “are you likely to repay the loan?” Obviously you need to verify that you do have sufficient capacity to repay the loan, but even if that is the case, you still need to show that you are likely to meet your loan repayments, on time.

Pay rent or mortgage payments on time, so you can demonstrate good money management. Rent or mortgage payments are a fixed and known regular commitment. By making sure these are always paid on time, you can show a good payment history to a potential lender, showing that you prioritise meeting these important commitments. This is especially important if you don’t have any other credit facilities at the moment. A lender will often want to see the last three to six months payment history for other loans, hire purchases or credit cards; if you are unable to show this, then your rent or mortgage payments may be an acceptable substitute to show your commitment to meeting regular payments.

So, while having defaults and collections on your credit check report does mean you might have a “bad credit” profile, provided you can demonstrate you have put some good money management practices in place, and that you have the intent to meet your commitments, it doesn’t mean you will now automatically be declined for a car loan.

While clear credit and a good credit score is likely to get you an easier approval - and of course lower interest rates - by putting in a little bit of work to turn your credit profile around, you may still be able to get that car loan approved.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure the content is correct, the information provided is subject to continuous change. Please use your discretion and seek independent guidance before making any decisions based on the information provided in this article.

I/We

Declare the information provided in my/our finance application is true and correct and that I am/we are over the age of 18 years and I am/we are not an undischarged bankrupt/s;
(i)Verifying any information that I/we give to you (or information that you may collect from other sources) with third parties and third party databases, including Government agencies (for eg. NZ Transport Authority, Dept of Internal Affairs, Motor Vehicle Register (name and address), PPSR) for a purpose related to your application for credit, or administering your account with us, including for fraud prevention and complying with the Anti-Money Laundering and Countering Financing Terrorism Act 2009.
(ii) There are two ways that you can restrict access to your personal information on the Motor Vehicle Register in certain circumstances, namely:
1. Opting-out
2. Obtaining Confidential status
Opting out is a very limited form of restricting access to your information, and it does not mean that Waka Kotahi will never disclose your information to third parties.
For more information about who can access your personal information on the Motor Vehicle Register, and ways to restrict access to your personal information.
Visit: https://www.nzta.govt.nz/vehicles/how-the-motor-vehicle-register-affects-you/who-can-access-register-information/.
Appoint you [One Partner Ltd, trading as LoanSpot / loanspot.co.nz] as my agent to collect, use and disclose my personal information for carrying out credit checks on me with a credit reporting agency. This will require you to give my information to the credit reporting agency as well as the credit reporting agency providing information about me to you.
I authorise any third party to provide my personal information to you for any of these purposes.
I understand that if you disclose my personal information to a credit reporting agency, they may hold my information on their credit reporting database and use it for providing credit reporting services and for any other lawful purpose and they may disclose my information to their subscribers for the purpose of credit checking or debt collection or for any other lawful purpose.
Agree the FINANCE COMPANY may collect from credit reporting agencies, credit providers, my/our employers/s, accountant/s, or other named person/s or relative/s, such personal, financial and commercial information and references about me/us as is necessary for the purposes of considering this application. And I/we agree that you may produce this authority to such parties for the purposes of collecting such information.
I/we agree to meet the cost of an independent valuation of the security to support this application such valuation to be obtained by you in consequence of this applicant. My/our solicitor/agent is authorised to accept any notification on my/our behalf.

I/We acknowledge that if the FINANCE COMPANY provides this finance the FINANCE COMPANY:

Will keep the personal information during this period the finance is provided and for six months after repayments of all credit provided by the FINANCE COMPANY:
May collect and monitor personal information about me/us as is necessary for the administration and protection of such credit: and
May provide any of the personal information to a third party employed by the FINANCE COMPANY to assist in enforcement of any agreement between us.
I/We request the FINANCE COMPANY or any related finance company to send me/us details of other products and services from time to time.
I/WE shall have access to my/our personal information and retain the right to request correction.

Provision of Additional Services

I authorise the FINANCE COMPANY to disclose personal information about me to a credit agency for the purposes of compiling a credit report and creating a credit profile. Further I authorize the FINANCE COMPANY to use my personal information for merchandising, market research and offering additional services including newsletters from One Partner Ltd or the offer of additional credit facilities.

The information that may be disclosed includes: name, address and telephone number; the loan amount of any facility; any debits made; the frequency and amounts of payments made including details of overdue payments. I understand that I have the right to access and request correction of my personal information held by the credit reporting agency.

Credit Concerns? How to get credit-record-ready for vehicle finance