How to Improve Your Credit Score Before Applying for Car Finance

Thinking about buying a car soon? Whether you’re going for something brand new or a solid used car, one thing can make a big difference in the kind of deal you get — your credit score.

Even a small boost in your score can mean lower interest rates, better car finance deals, and access to more quotes. It can be the difference between a “yes” with great terms or a “no” or costly repayments.

Improving your credit score might sound boring or tricky, but it doesn’t have to be. With some smart and simple steps, you can raise your score and put yourself in a stronger position when applying for car finance.

Here’s how to get started.

Check Your Credit Score First

If you want to get good car finance deals, start with the basics. You can’t improve your score if you don’t know what it is.

You can check it for free using sites like:

• Experian 
• Equifax 
• TransUnion 

These reports will show you what’s helping or hurting your score. You’ll also spot any problems, like an account you forgot about or a payment you thought was sorted but wasn’t.

Make a note of your score now. That way, you’ll see how your efforts pay off later.

Always Pay on Time

Your payment history has a big impact on your credit score. If you miss payments, even by a few days, your score takes a hit.

Try setting up auto-pay for your credit cards, phone bills, or any loans. If you can’t do that, reminders on your phone work just fine, too.

Let’s say you forget to pay a credit card bill for £25. It might not sound like much, but it shows up on your credit file. That small slip can end up costing you hundreds in interest if it hurts your loan options later.

Keep Your Credit Use Low

Credit use — or “credit utilisation” — is the part of your available credit that you’re using. The lower, the better.

Here’s what that means:
If your card limit is £1,000 and you’ve spent £800, you’re using 80%. That’s high. Try to keep it under 30%, or even lower if you can.

So, if you’re planning to apply for car finance in a few months, start paying your balances down now. Even small extra payments help. And avoid using the card for unnecessary stuff while you’re working on your score.

Don’t Apply for Too Much Credit at Once

It’s normal to shop around when looking for car finance. But be careful — too many applications at once can hurt your score.

Each application usually leads to a “hard search” on your credit file. A couple is fine, but if you have five or six in a short period, lenders might think you’re desperate for credit.

Make Sure You’re on the Electoral Roll

This is a simple one. Lenders want to know that you are who you say you are — and where you live. Being registered to vote helps with that.

If you’re not on the electoral roll at your current address, do it today. Just visit your local council’s website. It only takes a few minutes and can make a real difference to your credit score.

Keep Older Accounts Open

Older accounts show lenders you’ve managed credit over time. That’s a good thing.

So, even if you’re not using an old credit card much, don’t rush to close it. Having that history helps.

One exception: if the card charges an annual fee and you’re not using it, it might make sense to cancel. Just make sure you’ve paid it off fully before you do.

Look for Mistakes on Your Credit Report

Errors happen more often than you’d think.

Maybe you closed an account years ago, but it’s still showing as open. Or maybe there’s a payment marked “missed” that was never late.

Take a good look through your credit report. If you see something that’s wrong, you can report it online. The credit agency will look into it and fix it if they agree.

It might take a few weeks, but once corrected, your score could jump quite a bit.

Avoid Payday Loans

Even if you’ve paid back every one on time, payday loans don’t look good on your credit history.

Lenders often see them as a sign you were struggling with money — and that could make them nervous about giving you a car loan.

If you need to borrow money, talk to your bank or consider a credit card with low interest instead. And if you’ve already used payday loans, focus on building a better pattern now with safer, long-term credit options.

Don’t Close All Your Credit Accounts

It’s tempting to clean up your credit file by shutting everything down. But this can backfire.

A mix of credit (like one credit card and one loan) is actually helpful. It shows you can handle different types of payments.

Closing accounts also reduces your total available credit, which might push up your credit use percentage. And as we mentioned earlier, high credit use can lower your score.

Keep things tidy, sure. Just don’t overdo it.

Give It Time

This is the part no one wants to hear — but time does matter.

Credit scores don’t go from poor to great overnight. But if you’re consistent, even a few months of good habits can move your score enough to get you better car finance quotes.

If your timeline for buying a car is flexible, give yourself a bit more time to improve things. The better your score, the better your deals.

Final Thought: Be Ready Before You Apply

Applying for car finance is easier when your credit score is working with you, not against you. Good habits like paying on time, lowering your balances, and using safe tools like car-finance to compare quotes can make all the difference.

You don’t have to be perfect. You just have to be a bit more prepared.

So take a breath, fix the small stuff, and keep going. Your dream car might be closer than you think — and your improved credit score can help you get there on better terms.