Can finance harm your credit rating? | Noya Motor Group

Looking for car finance and worried it will harm your credit rating? Here is everything you need to know about finance, credit ratings, and the nitty gritty that goes with it as well.

It is a common misconception that finance harms your credit rating, and as a blanket statement it is not true. Of course, there are some cases whereby finance doesn’t have a positive impact on your credit score, but that will be in situations such as missed payments, whereby the agreement has been ignored or missed.

As a rule of thumb finance isn’t bad for your credit rating but here are some things that might be worth knowing…

Hard search versus Soft search

So there are two types of searches than can be carried out as part of a finance application. A hard search and a soft search. A hard search will leave a mark on your credit file, and too many applications in a short period of time can negatively impact your score. A soft search does not show up and it is a way of seeing what the deals could look like for you, without actually having a hard search conducted, so you can save the hard search for when you are ready to commit.

How finance impacts a credit rating

Finance can have a positive impact on your credit rant gif you keep up with all payments, although it isn’t guaranteed of course! We would never advise you to use finance as a way of boosting your credit rating, and we would implore you to speak to a financial advisor about this.

Eligibility for car finance

Being eligible for car finance is also a massive part of the process. There is no such thing as guaranteed car finance and so there is always a slight chance you won’t be accepted. However, we work with a range of lenders to maximise your chances of being approved for car finance.

So, in short, it is rare that car finance itself will harm your credit rating. If you are worried or concerned at all, get in touch with a member of our team here at NMG and we can chat through finance to find out whether or not it would be the right option for you.