Finance

How to Evaluate a Car before Getting Car Finance

How to Evaluate a Car before Getting Car Finance

Living in the UK and want to buy a used car? You are not alone, millions of people in the UK prefer to buy used cars over new ones and this is why the UK’s used car market is the largest in Europe. According to a report published by the University of Buckingham, ‘Price’ is the most important factor that consumers look at when buying a used car. If you too are thinking about buying a used car any time soon then you should evaluate a car before financing for it. Here are some tips to evaluate a car in order to avoid the possibility of buying a lemon.

Perform a Pre-Test Drive Inspection

No matter how glossy and attractive the car looks from the outside, it’s the engine and various other internal components that should be inspected first because the car’s performance depends upon them. So before you sit inside the driving cabin, you should first open the bonnet of the car and inspect the car’s engine, engine oil, coolant, transmission fluids and many other internal parts.

Ask for Claim History of the Car

The cars that are insured have a proper history of how many times they have been damaged in accidents and the money claimed for its repair. This will give you insight on the true resale value of the car. Remember, a car that has been damaged numerous times is likely to have a low value and should not be purchased.

Drive With Windows Down and Radio Turned Off

Nothing will give you an idea about the car unless you drive it yourself. After you are satisfied with the internal components of the car and its insurance claim history, it’s time that you fasten your seatbelts and take the car for a test drive. Remember that the radio of the car must be turned off and the windows must be rolled down so that you can notice any unusual sound made by the car while driving it.

Don’t Believe the Price Tag, Determine Fair Value of the Car Yourself

The price of the car doesn’t reveal anything about the car itself. Your mind might trick you into believing that a car carrying a high price tag might be the best but this case is seldom true. You must vet the car diligently and look for any faults that the owner of the car is not pointing out in fear that it will reduce the value of its car. After your analysis, you must determine the fair value of the car and must never pay any more than its fair value.

After performing all the above tasks, it is time to contact a car loan provider and avail the financing for the car. Most people do not do a thorough evaluation of the car and thus end up with a lemon. Remember that used car market is the one in which many people are fooled thus Nobel Laureate Mr. Akerlof gave the example of this market to explain the lemon problem, so keep your eyes open!…

What’s a Good Credit Score and How You Can Get One?

What’s a Good Credit Score and How You Can Get One?

Credit score is a parameter on which lenders weigh the ability of potential borrowers to repay the loan they are applying for. Extending this to the understanding of having a good credit score, it basically implies having a greater chance towards securing a loan or a mortgage.

Itching to have a good credit score but you really don’t know how to do it?

We are here to help you out.

Be Regular With the Payment of Your Utility Bills

Utility bills are part of our routine lives. So much so, that they are now considered as nominal expenses.  And if your credit file demonstrate your ability by showing you have been responsible with your regular expenses, chances are that you will show greater sense of responsibility towards paying your loans. Therefore one way of improving your credit score is to be regular with your utility bill payments.

Check Your Credit File

CallCredit, Experian, and Equifax are three credit reference agencies that lenders use to evaluate your credit history. Get your credit file from each of these three agencies and thoroughly review it. If you think there has been a mistake in bio-data or a mistake from one of your creditors while closing your account at the end of the reporting period, get it fixed.

Use Credit Card to Your Advantage

Debit cards may seem a better alternative than credit cards, as any transaction that you are intending to make gets deducted directly from your bank account, thus helping you with your budgeting. But they don’t help you build a credit score that a credit card can. Being regular with your credit card payments, corroborate your credit worthiness and makes you less of a risk in the eyes of a lender. This helps you improve your credit score.

No Need for Credit Hoarding

Unused credit can sometimes result in negative marking of your credit score. Why lenders would be interested in granting you a loan, if you do not add to their business. So if you have too much reserve credit that is not being used, it’s better to get rid of it.

Your Application Matters

When you apply for a loan, lenders not only look at your credit file but they also assess your credibility in the light of that specific application. You can have a healthy credit file while repaying your regular bills and credit card payments but if you don’t have a history involving large sums of debt repayment, this may affect your changes of securing a hefty loan like a mortgage.

Therefore it is advisable to work beforehand on providing a justification on how you would be able to pay a mortgage, if you have never acquired anything other than payday loans previously.

Avoid the Gung-Ho Approach

When we apply for a credit, we tend to box drop applications at almost every finance crediting institution. Believe it or not, but excessive amount of applications submitted over a short period of time can degrade your credit score so always avoid it.

Handling your credit score needs to be taken seriously as it can easily shape or deform your future. However, improving your credit score does not require you to crack nuclear codes. It is a collection of small steps that can be executed easily.…