Which Car Finance Companies Use Experian?

If you're thinking about looking for finance, then that must mean you have found your dream car! Amazing! 🚙 🎉 Did you know car finance companies assess applications using information from credit bureaus? This is a crucial step lenders take in determining whether they'll approve or reject your application. One of the UK credit bureaus is Experian. Do car finance companies use Experian? Sure, they do. Experian provides reports to lenders on loan applicants' credit history and their loan repayment records.    

Various lenders such as credit card companies, mortgage companies, and car finance companies report borrowers’ payment histories to the credit bureaus. The credit agencies then organise the information they receive, determining which accounts have a good standing and which do not. Along with that, they will also categorise accounts that are in public records, such as liens (whether you have a charge against your house for a mortgage for example), County Court Judgments (CCJs) and bankruptcies and IVAs (Individual Voluntary Arrangement). 

What Exactly are Credit Bureaus?

Credit bureaus are also called credit reporting agencies or credit report companies. They are national organisations that research and collate credit information from consumers. The focus of their business is to sell such information to lenders such as car finance companies. This way, lenders will be able to make sound decisions on applications for financing. 

Credit reporting companies work together with various types of financing institutions so that these lenders can make the best decisions about loan applications. The main purpose of credit bureaus is to ensure that the lenders have the details and information they need so that they can thoroughly assess the application before granting the individual a loan.

How Do Credit Bureaus Work?

Imagine credit bureaus as information warehouses about consumers’ borrowing behaviours. Every time you apply for financing or a loan, the lender will assess your application to find out if you have the capacity to repay the loaned amount. To help them arrive at a sound decision, they work with credit bureaus so that they can see your credit history and know whether you were able to repay your loans on time.

Information Collected By Credit Bureaus

Personal Information

Your personal information includes your name, date of birth, address history, and employment history. These details will help credit bureaus identify you and also distinguish your account from other individuals. 

Public Records

Any bankruptcies, foreclosures, evictions, County Court Judgements and other public records are reflected in your credit report. 

Inquiries

Whenever a lender asks a credit bureau about your credit and does a "hard check," the bureau records it, and it stays on your credit report for around a couple of years. Consequently, it may affect your credit score because it will decrease by a few points. (So not a good idea to keep applying for credit if you keep getting turned down!) But as long as you pay your loans on time, this is something that you shouldn’t worry about. 

Tradelines

These are the records of the loans you’ve taken. It’s the most crucial information that credit bureaus collect. It also includes the type of loan, the lender’s name, loan balance, payment records, account status, and any comments regarding your account.

Credit reporting organisations do not make decisions on whether to accept or reject financing applications. They only collect and then process the information they receive from lenders about a person’s credit history. The services of credit bureaus are not only extended to lending companies, for example, but a phone company, for example, will also do a check before granting you a contract. Individuals may also request their service if they want to know about their credit histories and scores.

How to Improve My Credit Score?

Lenders look at your credit score when they’re assessing your application. It’s an important factor if you want to get car financing. The higher the credit score, the better your chances of securing a loan with a favourable interest rate. If your credit score and history are not very good, don’t worry because there’s still something you can do about it. Here are the steps to improve your credit score. 

Pay Bills on Time

Car finance companies and other lenders review your records to see if you pay your bills on time. They do this because your past behaviour in paying previous loans is a predictor of how reliable you will be in repaying future financial obligations. Improve your credit score by paying your bills in a timely manner each month. 

Use Credit Cards Responsibly

Your credit utilisation ratio is also crucial in calculating your credit score. To get this number, all your balances from credit cards are divided into your total credit limit. Using your credit card responsibly is good because it helps in building your credit history. However, make sure that you pay off your debt on time and maintain low credit card balances. 

Avoid Multiple Financing Applications

If you’ve applied for financing but got declined, it’s best not to reapply too soon. It’s because multiple applications will result in a lot of hard inquiries being added to your credit report. This will knock off several points from your credit score. Instead of reapplying, know why your application got declined in the first place. By knowing the reasons, you’ll be able to prepare better for the next time you try again. 

Which Credit Bureau Does Carmoola Use?

Carmoola uses TransUnion, which is another major credit bureau like Experian. TransUnion acts like a huge database that collects information from lenders, as well as public bodies. The collected information is processed and becomes available to car finance companies like Carmoola. Carmoola can then review and evaluate applications for car finance thoroughly using TransUnion.

Car Financing with Carmoola

If you’re looking for a no-fuss car 24/7 financing, check out Carmoola. All you have to do is download the app and follow the instructions. Enter your personal details, like your name and address. Prepare your driver’s licence for the verification process, and then take a quick selfie.  Done! In a few minutes, yes minutes, you’ll find out the result of your application. What's not to like?

Carmoola processes all applications for car financing online - no calls or personal appearance necessary. Our goal is to make it quick and easy for qualifying individuals to purchase their dream car. So, if you have been searching for a convenient and simple way to spread the cost, that’s exactly what Carmoola offers. And once you have your Carmoola Card approved, you can go out there and negotiate a great car deal almost anywhere!

Check Carmoola’s car finance deals here. For the latest tips on how to finance a car and other related articles, be sure to check our blog regularly. Do you have any questions for us? Reach out! We’ll be happy to talk to you! 👐