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Can I Lease A Van With Bad Credit?

Published on Thursday 05 March 2020 in Van News

Can I Lease A Van With Bad Credit?

Getting a van on a lease is all about getting credit, and while 'bad credit' or a "poor credit rating" is a real thing, like everything in life it's based on a variety of factors… and you'd be surprised by some of the steps you can take to improve yours.

 

What Is The Eligibility For Van Leasing?

Being eligible for a van lease comes down to a variety of things… not least of which is the ability to pass a credit check and simply having the funds to budget for keeping up with simple monthly rental payments.

There are usually 3 important pieces of information any person looking for a lease van will be asked to product, they are:

  • Personal details - name, date of birth, marital status.

  • Company details - name, address, company registration numbers and annual turnover.

  • Business bank details - bank name, account number, sort code.

The only time you'll be asked to provide anything beyond the information above is if your business is less than a year old… or if you've been refused finance in the past. In these cases, the final thing you'll be asked for is:

  • Business bank statements for the last 3 months.

Once that's all done and the credit check is completed you are eligible for a van lease and can happily wait for your brand new lease van to show up on delivery day.

A poor credit history - failure to make payments, cancelling finance in the past, etc - can weigh against you when trying to get a van lease, but some people who assume they have a poor credit history don't.

 

What If My Business Has Bad Credit, But I Have Good Personal Credit?

Good news on this front - business and personal credit ratings are separated down the line of your personal credit score and the score held by your company.

The only time personal credit is taken into consideration on a business lease is if the business is new or has a poor credit rating - in those cases personal credit scores are what will be used to decide your eligibility.

On the flip side, if you have a good set of business accounts that demonstrate good business practices, bill payments and any previous borrowing you're in a good position and your personal credit should play little to no part in your eligibility for a van lease.

 

What Are My Options If My Application Fails?

When you lease a van with Vanarama, you'll really see the benefits of panel funding. We work with over 10 credit companies to get you the best deal possible, but it also means that there are 10 companies with which you could get credit.

Please remember that while we can't guarantee that credit will always be accepted, we have an experienced team here at Vanarama who will always put all their efforts into finding you the best product, and match you with the most suitable funder to your situation.

Vanarama is also always on hand to answer any questions you may have, so don't hesitate to pick up the phone and let us help you out.

 

How Can My Credit Score Be Improved?

Credit report on top of laptop

There are a few things to remember about credit checks and what matters when the check is running.

The ability to make the monthly rental payments - proved by your income - is key, but also your historical ability to make monthly payments, such as a mortgage.

There are, however, a few other things that will play a part in your acceptance for finance:

 

  • If you have lived somewhere for a long time, that's a good thing! Why? It helps the finance company find you.

  • Make sure you're on the electoral register because that can massively swing things in your favour.

  • If you've gotten credit before, that's a good sign you understand the importance of making payments! All a finance company will look at is how you managed your previous payments back then – if you kept up with them in the past, you're a good prospect for lending right now.

  • If you can afford to put down a bigger deposit than the lease deal might require, this can really help your case to get finance. A larger initial rental lowers the risk you present and the amount of money you need to borrow. Simply put: the less you borrow, the easier you might find it to get credit.

  • Paying any outstanding bills and clearing any credit card debt is a good way to see some improvements in your credit score.

  • On the flip side, if your business is new and you don't have much of a credit rating, take out a credit card make regular monthly business purchases - e.g. fuel - and make sure you pay it off each and every month.

 

Question Answered By Tom Roberts

Tom Roberts is Vanarama's resident commercial vehicle expert, video presenter & content manager.

Tom's passion for commercial vehicles is at "diesel-head" level, so it's a good thing he's found a job to channel it into

Other popular customer questions answers include:

  • Can I Cancel A Van Lease?
  • Can I Lease A Van As a Sole Trader?

Read other customer questions, check out our latest van lease deals or take a look at our handy van leasing guides

 

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