So many finance companies say that they accept people with poor credit history, but end up rejecting so many. Sometimes, you think your credit standing is good, only to find out that there's a slight tarnish in your otherwise clean record. Before you go bonkers, there may be more to the story than you think.
Not just big debts
Unpaid defaults have a knack for lurking on your credit history without you knowing it. They don't even have to be big debts. Here are a few defaults you probably never thought of:
- Unpaid phone bills
- Unpaid internet bills
- Unpaid electricity bills
- Unpaid water bills
Service and utility providers have a tendency to over-eagerly hand people defaults, and these types are definitely small fry on the default spectrum. This is why a lot of lenders can look past these miniscule defaults, especially if they only happened once or twice in the last few years. Of course, others would prefer that you settle them before they even consider lending to you. If you accumulate defaults over a period of time, you're less likely to get approved for car finance from most places.
The defaults you know
People hear the word default and automatically think thousands of dollars in debt. While this isn't always the case, there is a lot of truth in this line of thinking. These are the bigger fish in the default spectrum, and can definitely make getting car finance a lot more difficult. These are:
- Outstanding student loans
- Outstanding home loans
- Outstanding defaults to other financial institutions
- Outstanding defaults to banks
- Outstanding defaults to other lenders
If you have any of these big defaults, most lending institutions will need you to pass through the eye of a needle before even thinking of lending money to you. Whether it's a car loan, home loan, personal loan, or business loan -- and for whatever reason -- you're going to need a lot of patience and proper documents to dispute what's on your credit history. If they do nudge towards approval, most will either ask you to settle these defaults before giving you the car loan or require a much higher interest rate as you are higher risk. If your defaults are small, e.g., you missed one weekly car payment worth $89, make sure that you have evidence to back it up and your lenders may just waive their typical restrictions.
Court writs and judgements
If your creditor takes you to court because of unpaid debts, and you didn't file a defence or your defence was unsuccessful, a judgement debt will be ordered, issued, and enforced for you to pay the creditor the debt amount, plus interest, plus legal costs.
If payments have been settled, the court judgements or proceedings related to debt are incomplete, pending, or insubstantial in nature; some finance companies may still overlook the writ or judgement and provide you with car finance. If you are appealing a currently in court and your case in on favourable grounds, some lenders may overlook your legal history altogether. Just make sure that you have proper evidence and documents to back you up
The keys for you to get car finance with unpaid defaults in Australia are knowing your credit history and having the proper paperwork to show lenders you've got what it takes to handle car payments. Not everybody will say yes, but remember that there are creditors out there who will give you a chance. At Alpha, remember that we look at your future and not your past. So if you need a car, but are unsure because of bad credit or unpaid faults, give us a ring at 1300 25 74 26 and we would happily discuss your options with you.