Do you want to buy that new car, bakkie or SUV but the car prices these days are just way too expensive? The obvious solution is vehicle finance, and in this video, I will explain what the minimum credit score is when you want to apply for vehicle finance. I will also explain what lenders look at before they approve your loan.
Before we begin, in order to apply for vehicle finance, you must have a car that you want to buy first. A lender will not approve your finance if you haven’t decided on the car…
So let’s discuss the main things they look at:
- Your credit score
- Your affordability
- Your payment history
Let’s start with your credit score. Generally speaking, the minimum credit score to be approved for vehicle finance is between 600 and 650+, depending on the amount. Anything lower than 600 will most likely mean that you will be declined.
If you look at My Credit Status’ risk classes, you need to be at least an average risk to be considered for vehicle finance.
The next thing they look at is your affordability. Lenders are not allowed to approve a loan if you can’t afford it – even if they want to. It’s a law that they have to abide by, and it’s set out by the National Credit Act to protect consumers. The way they determine your affordability is to subtract your expenses from your income.
The last thing they look at is your payment history. If your credit report shows that you are a responsible individual who repays his loans on time, then your chances of getting approved are pretty good, provided that you meet the other requirements we discussed already.
So let’s recap:
- Your credit score should be between 600 and 650 minimum to be considered for vehicle finance
- You should be able to afford the monthly repayment
- Your credit report has to indicate that you have a good history when it comes to repaying your loans
If you want to find out if you will be able to qualify for vehicle finance, simply head over to My Credit Status now to get your personal credit report.