Credit Rating

[Stevoox]

In the process of looking for a meg250 and selling the clio.

At this stage i've found a car which i'm viewing on sunday and hopefully he can hold on to it until the clio goes...

I've found a company who will finance a private buy but it appears they have based their initial quote on a lower credit rating and so bumped up the interest rate! Another finance company offered £50 less a month on a car that is in total 1K more!

Ive never missed a payment on a credit card, ill purposely pay for my insurance on it so i can pay it off early just to boost my rating, last car was paid off over a year early and the 200 will be paid off 2.5 years early. But i guess as i'm not a home-owner that holds it back?


My question is, can a a finance company adjust the credit rating and thus the interest they are working on for their offer to you to try reduce the monthly payments? Because if they did work on the best being 5.9% (i think) then monthly repayments would drop by nearly £100 and id be paying less than i am for the clio... Or are they 'binded' in some sort of way they they can only work on your credit rating and not make any change?

I would have assumed it was at their discretion, they can look at all my statements, see a payment has never been missed and always been made early, therefore if they work on the lower percentage id quite clearly have no problem paying as its less than i do now!

Want to avoid applying to any more finance companies as each application reduces your credit rating

 

[Mentalpen]

I would ask if you are being charged a personal or representative apr, if its personal ask why?

also are on the electoral role? if not that may be the issue. They like to know where to chase you. Also put your house not mobile phone on the forms, again they like to be able to find you.

It may be you are too good and they feel they won't make money from you so are bumping up the apr in case you pay it back early and they get less back.

 

[Fernandez]

Read this....

http://www.moneysavingexpert.com/loans/credit-rating-credit-score

Its not about how risky you are, its about how much profit you are...

 

[Kelv]

I was going to ask about the electoral role aswell, finance companies love this so they can prove where you have been living.
I would certainly go back to the initial company and see what they can do, 2 mins on the phone could save you a good few quid.
but, if you've found another company that can cater for you, with lower payments (I assume this is reflected due to it being a lower interest rate) then why not go with them?

you may also find, that if you currently have a loan you took for the clio, which hasn't been settled as yet and you are now applying for a second loan for another car, they may look at both of these repayment amounts and consider if combined they are close to what you can afford.
obviously the first will be settled as soon as the car is sold and the new loan taken out, but they will see it all as a combined monthly outgoing, as they only have your word that the first loan will be settled.

 

[Roy]

They can basically charge you whatever they want as there's no regulators to over see them.ayes being on elect roll is a big +

 

[Stevoox]

but, if you've found another company that can cater for you, with lower payments (I assume this is reflected due to it being a lower interest rate) then why not go with them?

The first choice is a black 13K meg (private seller) which is the one in question but another finance company has given me the monthly rate on a 14K grey meg (trader seller) and its nearly £50 less each month.


Metalpen, I'm not to sure to be honest. I've never bothered to vote in my life.
I guess all i can do is ring the finance company against the black meg on my lunch break and ask them what they can do on the rate. If they can lower it to similar im paying for the clio then thats fine, if not then they can close the file as ill go no further with them

Cheers Angel, will give that a read

 

[Kelv]

ah gotcha now Steve, I didn't quite pick up on that initially, sorry.

at which point, I think its down to which car of the two you really fancy then?

also, you may not have voted, but can still be on the register.
do you get a voting card turn up with your name on come voting time?

 

[Stevoox]

ah gotcha now Steve, I didn't quite pick up on that initially, sorry.

at which point, I think its down to which car of the two you really fancy then?

also, you may not have voted, but can still be on the register.
do you get a voting card turn up with your name on come voting time?

The black meg is a preference and SHOULD be cheaper than the grey one as im financing a grand less so it just depends if the finance company will drop the interest rate.

Pretty sure i do yeah, but it usually gets binned

 

[Kelv]

by the sounds of things you have no reason to believe you have any adverse warnings or markers on your credit file, so the finance market should be opening their arms to snap up your business.
id spend a little bit more time shopping around and seeing what deals/rates you can acquire.
but, don't keep making too many applications, as this does stand out on your file aswell.

 

[colwill197]

Do a search for your name on 192.com/.co.uk not sure what the URL is. If you are on it you are on the electoral roll. If you are not then google how to get on your local boroughs electoral roll. Will take 2-3 months before working but should save you a lot

 

[Stevoox]

I've done a search on 192 and my name doesn't appear.

Next step is just to ring the finance people later and see what they can do, if they want the business, drop the rate...if not then bye bye.

As long as they aren't bind to going by the credit rating only and can adjust the interest etc applied at their discretion then hopefully stand a good chance of getting them down.

 

[MrDrums]

Every company who supply credit do use the big boys to check customers 'score' such as experian, equifax, call credit etc..

However, along with this, they also have their own internal scoring system. Yes, you may find that credit card companies may not supply you with a card if you have never missed a payment or paid interest as credit cards are purely there to make profit. Finance companies are a different ball game as they make the profit once you sign on the line as it is going to be a fixed payment at a fixed apr.

There is room for haggle with finance companies as the majority of rates are decided in house and not really swayed by external companies once you pass the initial check.

 

[Fernandez]

Most lenders set their rates according to differing lending ctiteria so there's not many who will offer you a lower rate just for ringing them.

If you do phone around ask them to perform quotation searches as this won't adversely affect your credit. As Kelv says too many searches in a short amount of time does more harm than good.

 

[Stevoox]

The comapny offering against the 14K grey Meg are working on 5.9%APR (£250 a month) and the company offering against the Black 13K meg are basing it on 23.9% (£277 a month)

 

[Kelv]

just to clarify, but I assume both companies are basing these quotations over the same duration of time?
but, 23.9% is a shockingly high figure if you can get a deal @ 5.9%, I really think you need to be shopping around.

 

[Stevoox]

just to clarify, but I assume both companies are basing these quotations over the same duration of time?
but, 23.9% is a shockingly high figure if you can get a deal @ 5.9%, I really think you need to be shopping around.

Im looking to put down a 4.5K deposit, so:

Car 1: Black meg advertised at £12,950
Finance company have quoted a rate based on 23.9% over 48 months of £277 a month.

Car 2: Grey Meg advertised at £13,991
Finance company have quoted a rate based on 5.9% over 48 months of £244


Car 1 is the preferred option (just because of the colour) and so ive asked them what can be done on the rate. If they based on 5.(% i should be looking at close to £200 a month. I'm just waiting to see what they reply with on email.

Want to avoid applying to other places as each application goes against your rating

 

[Fernandez]

Bear in mind that the garage will be making money from the finance company so they'll be looking at the finance packages that provide the best commission for them. Sometimes its better to source your finance externally from the garage.

Some garages will offer knock down deals on the car because its the finance commission that gives them the profit. I once bought an Alfa 156 V6 from one such garage, if I took their extortionate finance I got the car for nigh on trade price. So being crafty I put a call into my bank, secured the finance at a low rate. Then purchased the Alfa using their "guaranteed credit" 30% finance and then paid off the garage finance the day I picked the car up on my debit card without having to pay any interest as it was inside the cooling off period.

Funnily enough the bloke from the finance company tried telling me that I wasn't allowed to do that, my response was "shall we ask the FSA their thoughts on that one"

 

[Stevoox]

So, against the black meg they wont drop from 23.9%... which rules that out annoyingly.

Will see if the trader can hold the car until i've sold mine but i doubt they will...

 

[Stevoox]

Bear in mind that the garage will be making money from the finance company so they'll be looking at the finance packages that provide the best commission for them. Sometimes its better to source your finance externally from the garage.

Some garages will offer knock down deals on the car because its the finance that commission that gives them the profit. I once bought an Alfa 156 V6 from one such garage, if I took their extortionate finance I got the car for nigh on trade price. So being crafty I put a call into my bank, secured the finance at a low rate. Then purchased the Alfa using their "guaranteed credit" 30% finance and then paid off the garage finance the day I picked the car up on my debit card without having to pay any interest as it was inside the cooling off period.

Funnily enough the bloke from the finance company tried telling me that I wasn't allowed to do that, my response was "shall we ask the FSA their thoughts on that one"

Yeah, against the grey one (trade seller) its an external company that has ofered me, as its cheaper than if the garage provide finance.

I wanted to avoid a bank loan against the private buy as its a loan on yourself rather than the car

 

[Stevoox]

Looking on Lloyds (who i bank with) and that could be an option to finance a private buy, but again means another application...