Why was I rejected for a car lease?
Contrary to widespread belief, there is no credit blacklist for those with bad or poor credit. Each lender sets their own criteria for qualifying customers. So, if one car leasing company rejects your application for car finance, it doesn’t mean they all will.
Lenders sometimes refuse credit to those with a perfect credit rating, which can cause confusion and frustration. Whether you have a poor credit history or a perfect score, there are a variety of reasons why car leasing companies may decline your application.
Do you fit the company’s ideal customer profile?
Most companies have a specific idea of the type of customer they want to lend to. The data you provide on your application form can determine if a lender will accept you, based on whether you fit their ideal customer persona. Your age, salary, current debt level and other personal factors can have an effect on your application.
Do you pay your cards off in full every month?
You may have a perfect credit score but if you pay your cards off in full every month, companies will see you as unprofitable. If you manage your debt efficiently, you avoid paying interest. If financial companies do not make money out of you, they may feel a financial relationship is not worth their while. However, this is primarily applicable to credit card companies as opposed to car leasing companies.
“Check your credit report at least once a year to ensure all the information is accurate and up to date.”
Does your report show late or missed rentals, CCJs or IVAs?
If your credit report shows late or missed rentals, defaults, CCJs or IVAs, you may have a bad credit rating. Poor credit will lead car leasing companies to consider you a greater lending risk. At Eureka though, we are happy to help you secure a car leasing deal even if you have a bad credit rating. Apply online now and choose from our fantastic range of the latest models.
Did you make a mistake on the application form?
A mistake on the credit application form, such as writing down your address incorrectly or missing a digit from your salary can result in rejection, as it may lead leasing companies to suspect a fraudulent application. Completing application forms accurately can help to avoid issues with fraud databases and increases your chances of success.
How much credit have you applied for recently?
Applying for a lot of credit within a brief period can result in a poor credit rating, as it may imply you have rapidly rising debt levels. This can trigger red flags for many car leasing companies, as they may feel you would struggle to meet your monthly car lease rentals if you already have a lot of credit. If you have recently applied for a credit card, mortgage or loan, hold off on applying for a car lease for a while to space out your applications.
Are you on the electoral roll?
If you are not registered on the electoral roll, lenders may have difficulty confirming your identity. Joining the electoral roll is a great step towards improving your credit rating.
“Late or missed rentals, defaults, CCJs, IVAs and bankruptcies will negatively affect your credit score and ability to secure credit deals.”
Is the information in your credit report up to date and accurate?
Mistakes on your credit file can cause issues, so it is important to check your credit report regularly to rectify errors. Make sure to remove any financial associations that are no longer relevant, update your address, and dispute any other discrepancies. Dispute unfair defaults and CCJs and ensure that they are removed from your record if possible to prevent damage to your credit score.
Have you moved home or changed employment frequently?
Frequent address or employment changes can make you seem unreliable or unstable, even if there are legitimate reasons for such changes. Try to stay at the same address or with the same employer for at least three years to show that you are financially stable.
Is your name on the National Hunter or Cifas database?
Your name may appear on the National Hunter or Cifas database, which indicates a possible history (or risk) of fraudulent activity on your account. Car leasing companies may reject your application if they feel it is fraudulent or suspicious.
Have you checked your debt to income ratio?
Lenders compare how much debt you have with how much you earn each month. A high debt to income ratio may suggest that you would struggle to meet repayments if you are already spending a lot on repaying your outstanding debt every month. Keep your debt to income ratio below 36% to show companies you can manage your debts effectively. Our guide to your debt-to-income (DTI) ratio article explains DTI and shows you how to calculate your DTI ratio.
Eureka provides car leasing deals for people with bad credit and we are happy to talk you through your options. Complete our online application form to see which models you qualify for, or browse our range of brand new cars now.