If you have been rejected from obtaining car finance due to a poor credit history, there may be more to the story. Did you know unpaid defaults could lurk on your credit history without you even knowing it? Some large corporate businesses can tarnish an otherwise good reputation if you've ever defaulted. These defaults can range from small unpaid phone or utility bills to missing car loan payments.
It's more common than you think
Not paying a phone, gas, electricity or internet bill may put an unpaid default mark on your credit history. It is still quite possible to take out a car loan with an unpaid default, as some lenders understand how big service and utility providers are over-eager with handing people defaults.
On occasion, some financiers will ask for the defaults to be settled before considering lending to you. Others may not even take these defaults into account, depending on the frequency and severity of the defaults. If you have a lot of defaults over a given period, it may give lenders cold feet as they see you as a higher risk.
Other types of defaults
Unpaid phone or utility bills fall at the smaller end of the default spectrum. There are many more serious defaults that could make getting a car loan rather difficult for you. These are:
- Outstanding defaults to other financiers
- Outstanding defaults to banks or other financial institutions
- Outstanding court judgements or writs.
If you have defaulted on a loan such as a car loan, home loan, personal loan or business loan, many lenders will have severe reservations before lending to you. You will have to obtain and produce evidence to dispute what's already on your credit history. On average, car financiers will want these defaults settled before giving the green light for a car loan. If the defaults are small or even negligible, a few lenders may waive their usual restrictions in light of this information.
Court writs and judgements
In some cases, car loan lenders will still extend car finance to you if you have pending or incomplete court judgements or proceedings relating to debts or other financial matters. Court judgements and writs that have been handed down and actioned that are insubstantial in nature may be overlooked by some car financiers, and you may still be able to gain some sort of car loan. In most cases, you will need some supporting evidence and transcripts so your lender can assess your position. If you are appealing your case in the courts and on favourable grounds, some lenders may not take your legal history into consideration.
If you are unsure about your ability to access car finance with unpaid default or court judgements against you, talk to one of the financial professionals at Savvy. Click here to get your FREE no-obligation quote, or to contact us direct to discuss your situation.