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Which Car Finance Companies Use TransUnion?

Found a great new car you like 😃 and now thinking of how you can spread the cost? 🤔 Before you do, you may want to check your credit score so you can get an idea of how well you’ll fair on your car finance application. To do this, it helps to know the car finance company’s credit reference agency. For example, TransUnion is a popular choice for many lenders. And when it comes to knowing which car finance companies use TransUnion, Carmoola is one. 

Let’s learn more about TransUnion, why your credit score is important, and how you can improve your score so you can get the best car finance deals with the lowest interest rates. 

What is TransUnion?

TransUnion used to be called Callcredit. It’s among the UK credit references agencies that lenders and car finance companies partner with. The other credit agencies include Experian and Equifax. All these credit organisations have records of your credit report, and as you may already know, your credit report is crucial in evaluating your loan applications. 

The credit reference agencies may have identical information about your credit report, however, they may give you different credit scores. It’s because these organisations calculate the scores in different ways. The score range for each agency would also be different. 

For example, TransUnion’s best possible credit score is 710, with an average of 610. With Experian, however, the best score you can get is 800 but the average score is only 380. Each credit reference agency has its own way of interpreting your information, that’s why you’ll have different scores from each of them. 

Why Is My Credit Score Important?

Your credit score is not just a number that doesn’t mean anything. You can really benefit from having an excellent credit rating. When you have a high credit score, you will have access to more products and services like credit cards, mortgages, loans, and car financing. Along with these, you’ll also get better deals, lower interest rates, and higher credit limits. 

What if my credit score is not good? The first step to improve your credit score is to know what your score is. Once you know your credit rating, you’ll have an idea of how much work you have to put in so you can make your way to a better score. 

Keep in mind that your credit score is how lenders and car finance companies evaluate how reliable you are when it comes to paying back your loans. An excellent credit score will let lenders know that you are low risk, and they will more likely give you a good offer. 

Is My Credit Score Good Enough?

There are usually five categories for our credit scores: very poor, poor, fair, good, and excellent. Credit agencies have a varied numerical scale for this, so don’t worry if your score is different for each of them. While the score may be different, it’s more likely that you’ll fall into the same category for all of the credit agencies. 

With TransUnion, you can have a score ranging from 0 to 710. A fair credit score is from 566 to 603. A good one has a range of 604 to 627. And if your score is somewhere between 628 to 710, then it’s an excellent credit score. A higher credit score allows you to get better deals when you’re applying for car finance, credit card, or loan. 

Credit Scores and Car Financing

There are various car finance options available if you want to buy a car. No matter which type you decide to get, what’s crucial is that you know the process, and part of that is the credit check. Car finance companies first need to know your credit history. It will help them in evaluating if you’re going to be a good payer. 

Your credit score is a big factor that car finance companies consider. If you have a high credit score, then you’re more likely to get car financing with good interest rates. The score is given by TransUnion or other credit reference agencies, and they get this by evaluating your credit report. Your credit report shows your financial history and details of any missed payments and defaults. 

The car finance company will use these essential pieces of information so they can assess how likely you will repay the loan that they’ll grant you. While your credit report and credit score are not the only factors that lenders consider when you apply for a loan, they make up a huge chunk of it. That’s why it’s important to maintain a good credit score. 

How to Improve My Credit Score

If you find that you don’t have an excellent credit score, don’t worry because you can work on improving it. To get the best chances of getting car finance, it would benefit you to improve your credit score first. Here are some of the ways that you can do it. 

Pay Bills on Time

Lenders check your financial history, especially missed payments. Even one missed payment can affect your credit score negatively. Set up direct debits so you can pay your bills on time or ahead of time. 

Don’t Use All Credit

While it may be tempting to max out your credit cards, don’t. As much as possible, avoid reaching the maximum limit. Use only a small percentage of your credit if you can. It will help you because lenders will see you as a responsible borrower. 

Don’t Apply for Multiple Loans

Keep in mind that whenever you apply for a loan, it will add a record to your credit report. If there are too many of these records, it’s going to impact your credit score. If you must apply for multiple loans, make sure that there is a gap between them. If you’ve been rejected, don’t apply for another loan immediately. Improve your credit score first so that you’ll have better chances the next time. 

Takeaway

Lenders that use TransUnion or other credit reference agencies take your financial records seriously. Your behaviour when it comes to your finances will be revealed through those records so it’s crucial to be responsible financially. 

If you feel you’re ready to apply for car financing, you can check out Carmoola. It will only take a few minutes to know if you can get car finance with us! 👍

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