Things That Will Help and Harm Your Credit File


When looking to buy a car you may likely be considering taking out a loan. After all, not everyone has the money available to buy a vehicle outright. Car finance offers you more flexibility in terms of what you could drive away with. However, loans and financing are always affected by your credit file.

Your credit file is a record of payments you have made on credit with previous companies and agencies.  This file, or score, shows future lenders whether or not you can be trusted to pay the money back.  But what can affect it?


What Can Harm Your Credit File?

While it is always a good idea to keep up with payments if you want to keep your file clean, there are a few other ways your score may be affected.

  • Applying for credit can harm your credit file if you do it too often. That is because a ‘hard’ inquiry is listed on your file, whether or not you are even approved for the loan being applied for.
  • Failure to pay just one bill on time may be enough for your credit to be harmed. However, if you regularly let your debt travel to collection activity, where a bailiff may get involved, your credit score will take a severe nosedive.
  • The most significant impacts on credit scores are bankruptcy and foreclosure – both of which can and will stay on file for many years.


What Could Help Your Credit File?

If you’re looking to improve your credit score, the good news is that there are many things you can do to get started.  After all, the better your score is, the more chance you have of getting the car loan you want.


  • Always pay off debts that are already past their due date. Prioritise these as much as you can!
  • Access your credit report through an independent agency. Look and see if there are any discrepancies in your file.
  • Reach out your creditors. People you owe money to are likely to be more willing to discuss your debt than you might think.
  • Ask for help from financial advisors. There’s no reason why you should face credit problems alone.
  • Above all, credit files can take time to heal. Prioritise paying off debt, and take a look at loan opportunities later on down the line.


Can I Get a Car Loan?

Your ability to borrow money to pay for a car is all going to depend on your credit file.  Take time to clear your debts, and to take a look through your report in detail.  The better your file looks, the more cars you will be able to consider.


If you are looking at taking out a car loan and would like some independent advice from an expert, call Auto Car Loans today on 1300 301 051.





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