Most people have heard of credit scores, but how do they impact your ability to get a car loan at a good interest rate, and can they be improved? We break down the top eight things you need to know about your credit score
Every lender has a minimum credit score requirement. While the cut off for each lender is not publicly available, the minimum credit score to get a loan through the Jump Payments platform is 300. Our platform has the credit policies for each lender built-in, so we can help ensure we’re giving you more accurate pricing based on your specific credit score without even making a formal enquiry on your file.
Consumers should be careful before submitting a full application for a loan, because while getting a quote won’t impact your credit history, once you’ve lodged a loan application lenders will run an inquiry which will be on your credit file permanently.
To get a personalised loan quote, Jump Payments checks your credit score. This doesn’t impact your credit history, but returns a numerical value that allows us to match you with your eligible rates from our panel of lenders.
Once you choose to submit an application and we have worked to confirm your eligibility, only then will a lender pull your full credit file for a final check for any bankruptcies or outstanding loans that were not previously declared.
Each credit history enquiry remains on your file for five years. Numerous failed enquiries on your file is a red flag that your credit applications have been rejected by other lenders, and may impact your future applications.
Some providers of credit assistance will send your loan application to a lender without first checking your eligibility, which results in a full enquiry being made and a negative impact on your credit history if you’re not eligible.
Jump Payments doesn't make an enquiry unless we know you'll meet the minimum credit score requirement for your chosen lender
Jump waits to confirm your eligibility based on your credit score and an assessment of your income, expenses and other personal circumstances before lodging your application with your chosen lender.
Consumers should be weary when considering car finance from dealerships or other loan providers, and always ask whether your credit score will be impacted before providing your personal details.
Never missed a payment on a loan? Never even had a loan? You must have the perfect credit score, right? Not necessarily.
Credit scores are calculated based on a person’s demonstrated ability to consistently be responsible with credit products. This means if you’ve never had a loan, there’s no proof in your credit history that you’ll meet your repayments and lenders will treat you as an unknown.
Credit scores don’t start at 1,000 and only reduce when repayments are missed. In fact, you’ll have trouble getting a car loan with any lender if you haven’t used credit before. Some of the highest credit scores are from individuals with a large mortgage balance who have been consistently making their repayments over a number of years.
So what comes first, the chicken or the egg? The credit or the credit score?
Well you don’t need a car loan to start building your credit history. Most introductory credit cards or small personal loans don’t require a prior credit history - just steady employment.
While we’re not suggesting anyone should apply for a credit card if they don’t need one, they can be a good way to start building your credit file and often come with great perks like frequent flyer points.
Utility and phone bills show on your credit score too - so the day you move out of home your credit history will start to build. Just like a loan, defaults from utilities and phone companies will be recorded on your credit report. So late phone or electricity bill payments can impact your credit history, just as loan defaults do.
With the Jump Payments platform, you can check your eligibility for car loans for free (without impacting your credit score)
Understanding your credit score is important, but what does your credit score mean as it relates to car loans?
Unlike traditional comparison sites, we won’t just list the starting rates for various lenders. We’ll show you which loans you’re eligible for, and give you real, personalised rates from our entire panel of lenders tailored to your circumstances (including your credit score!).
If you want to see how your credit score translates to car loan rates, let our smart platform do the work for you.