Hessein's Blog

Many a times people are rejected or refused car credit because may be they do not satisfy the conditions of the lenders. Some of the many reasons to refused car credit are:

You have County Court Judgements against you: Someone makes a County Court Claim that you owe him money then the Court hears to the case and then decides that u need to pay the money back to that person.

You have mortgage arrears.

You are self employed.

You have a bad credit history.

Many companies refuse car credit to their customers due to the reasons stated above. If anyone is refused a car loan then the company informs the person on what grounds he has been refused the car finance. People refused a car credit because of these reasons can still get their car financed. There are many companies that do not consider these factors valid enough to reject car loans to people.

Sometimes people are refused car finance due to no fault of their own. It might be by mistake that they have been refused car credit. If someone makes a County Court Claim against you, and you consider it as a false claim then you should contact the Court and then inquire by filling up the form in the court.

If the company's decision of refusing car credit on the grounds of your bad credit history then you can get the address of the credit reference agency they had used. You can get your credit report from these agencies and then analyze on your own what the reason could have been for your refuse credit.

If you have already paid your CCJ, then make sure that it has been mentioned as paid in your credit report. Also make sure that all the information about your credit is correct. You should write an application to the agency to update any information that has not been updated or has been wrongly mentioned in your credit report.

If you are self employed don't worry there are many companies in the market that do cater to the needs of the self employed people. You just need to knock at the right door.

Car finance is basically a loan taken to buy your car. You need to pay back the loaned amount within a previously agreed upon period of time. The loan can be borrowed to buy a new car or even a used car. Now talking of loans, there are simply two types of loans:

1. The fixed interest loan: the interest rate of the loan remains constant for the loan.
2. The variable interest loan: the interest rate of the loan is variable for the loan.

There are many companies/institutions in the market that provide car finance these days. The procedure to get a car financed these days has become a very easy task. You just need to go to these companies/ institutions and fill up an application form. All you need to do is to fill in the true and appropriate details and if these companies/ institutions find the information filled by you as authentic, and KAZZAM --- U get the loan. Isn't that easy enough. It doesn't matter that you can pay back the financed amount or not because the loan has been secured against the car. That means if u don't pay back the loaned amount the company/ institution can take back the car.

But you need to be very careful at the time of filling up the application form. You should thoroughly go through the terms and conditions of the loan beforehand. The lenders also pre calculate how much will the total loan cost to you, the monthly installment that you need to pay and the interest you need to pay. Different lenders have different offers, so getting car finance is not a decision to be taken in a hurry. You should wait for the best offer to come at your door and then you can grab it.

Now the question arises that how can you get your dream car financed. There are many ways. There are many private companies/ institutions and banks that provide car finance. Nowadays, you can even get your car financed on the internet. There are many websites that offer easy and fast loans to the customers. But they all have different offers and terms and conditions where the latter needs to be dealt with carefully. And you can get approximately 80% of the car's total cost as a loan these days.

Yes car credit or YCC as it is termed in short means that the company offering ycc does not refuse car credit to its customer under this scheme. The customers with bad credit were the ones who were targeted by this scheme. YCC was a division that provided loans to the people to buy used cars which the company itself offered to them. But this scheme collapsed drastically. Yes Car Credit was taken off the road in the late December 2006.

But the aftermath of the ycc can be felt still now. There are many customers who are complaining that they had been lied to at the time of borrowing the loan. And also the cars that were offered to them by the lenders were not good. Also the channels being employed by the lenders to get their money back are also illegal and quite aggressive.

According to the yes car credit, the cars the customers had bought with the loaned amount could be returned after paying half of the loaned amount in cash and then not making any further payments in cash to the company. But there were a lot of hidden terms and conditions which were previously not referenced to by the companies. These terms and conditions included expensive insurance and warranty policies. So the borrowers were given high bills for these policies and insurances (for example many of the customers were billed for the GPA policy). Now the cost of these policies and the insurance were calculated separately and were a new and a separate loan altogether for the customer. So ycc gave extra hidden liabilities to the customers which were very unjust.

The profit on the car was less for the companies so they resorted to these policies and insurances so that they could earn high profits by selling them. The policies and the insurances that were sold to the customers were:

1. GAP insurance.
2. Payment protection policies.
3. Some warranties.

The cars should have been independent of these unjust liabilities. And now the customers under the YCC policy are being regularly threatened with phone calls and regular mails when they miss their payments. Also the cars that were sold to the customers were not of good quality standards and maximum customers had to face many problems with these cars. Getting the cars repaired resulted in high bills which were to be paid by the customer himself. Many customers want to return their cars back but the companies then demand a huge amount to cover the insurance.

These all factors led to the decline of the YCC. And hence, the collapse of YCC was inevitable.

Using a loan to overcome bad credit might seem like a bad idea at first, and in truth if it's not done correctly then you might end up causing more harm than good in regards to your credit rating. Not all attempts have to end in disaster. However; with careful management of your loan payments and a plan made out before you even submit your loan application, it's entirely possible to get your finances under control and repair some of the damage that has been done to your credit in the past with a loan.

Below you'll find some basic advice as well as common problems that you need to avoid so as not to end up creating even more credit problems along the way.

Debt Consolidation

On of the best ways to use a loan to overcome bad credit is to consolidate your outstanding debts into a single monthly payment. Debt consolidation works by allowing you to repay some or all of your previous debts with the money that you borrow, which in turn causes them to be reported as paid in full to the credit bureaus while leaving you with only the loan that you took out to repay.

It's important that you realize that you don't actually eliminate your debt by doing this; instead, you're simply repackaging it into a new loan with a lower interest rate and a more manageable monthly payment. You still have the same amount to pay, it's simply easier to pay it off in this manner.

Finding the Right Loan

In order to find the right loan you're going to have to do some searching. Take the time to find a number of lenders in your area and online, contacting each of them to request a rate quote based upon the debt consolidation loan that you want to take out.

The interest rates that each offers may vary depending upon the amount that you want to borrow and the collateral that you're using, so it's important that you use a high-value collateral such as home equity to get the most out of your loan.

Managing Payments

Once you've applied and have been approved, it's time to start making your loan payments. It's important that you create a budget if you don't have one already, since it can be easy to get in over your head when you're trying to repay a loan otherwise. Make sure that you make your payments on time, because even one or two late payments can begin a dangerous spiral that can cause further damage to your credit over time.

Pitfalls to Avoid

To make sure that you get the most out of your loan to overcome bad credit, make sure that you don't fall into one of the more common problems associated with this loan. In addition to making your payments on time, you need to make sure that you can stop yourself from running the balances of credit cards that you've paid off back up and creating additional debts simply because you can.

Since you haven't eliminated your previous debt but you have redistributed it, the temptation to use this newfound credit availability can be overwhelming. By creating large amounts of additional debt, you can end up creating problems that you won't be able to solve without major work or possibly even a bankruptcy.