Find out how to improve your credit score for a motorcycle loan in the UK. Enquire about a motorbike loan with bad credit at Superbike Loans today.
As experts in bad credit motorbike finance, we understand that giving your credit score a boost may help to bring down your insurance premiums. Perhaps the APR you’ve been offered just isn’t sitting right, and you want to increase your score for your own peace of mind or help with other motorbike loan requests in the future.
Improving your credit score can be a great way to increase your chances of getting approved for motorbike financing in the UK, as well as help with insurance rates. Let’s dive into how credit scores are calculated and how you can improve your credit score for a motorcycle loan.
How is your credit score calculated?
Whether you’re calculating your credit score for motorcycle finance, or generally want to know how the score is calculated, it takes the following factors into account:
1. Payment history
This looks at your payment history, typically over the past six to seven years. Lenders will check for missed or late payments to determine your score and trustworthiness for a loan.
2. Recent credit applications
Applying for too many credit applications, be it motorcycle loans, personal loans or any other loan in a short space of time can negatively affect your score and show lenders you may be a risky borrower to give a loan amount to.
3. Credit utilisation
This is used to determine how much credit you use. If your ratio shows a high proportion of credit utilisation, this can affect your score, as lenders may see you rely too heavily on credit or loans to get by.
4. Credit mix
As the name suggests, a mix of credit types from credit cards to loans can affect your overall credit score. If motorcycle loan lenders can see you manage payments well, it shows you can manage debt well, which will work in your favour. This is often why some loan applicants choose a motorcycle loan in the first place.
5. Credit history length
The length of your credit history can give motorcycle lenders a decent overview of how you’ve handled credit, debt and loans over a period of time. The preferred length of time will vary per lender, but typically you’ll want a year’s worth credit history at a minimum (though this can vary between lenders).
5 ways to improve your credit score for a motorcycle loan
Besides opting for zero deposit motorbike finance to reduce outgoings on your vehicle, there are tons of ways you can go about increasing your credit score to get the best financing rates.
1. Check your credit report
Checking your credit score can help you determine what you’re likely (and unlikely) to be approved for when you apply for a motorcycle loan. This is done by doing a soft credit check, which shows where you have taken out credit, including any credit cards, loans, mortgages, and any debts you have, such as a bank overdraft or being behind on your utility bills. A soft credit check does not impact your credit rating.
As the name suggests, this is not a hard check - which only happens when you consent to apply for a motorbike loan or some other form of credit. You can check your credit report from one of the top UK credit reference agencies:
- Credit monitor
Late and missed payments are also included and stay on your record for at least six years. Credit accounts you have closed might also still be recorded. However, if you spot anything that looks incorrect, you can dispute it with the credit reference agency. This can typically be done over the phone, but check with the credit reference agency you used and their contact instructions.
2. Keep up with your payments
As we determined before, late and missed payments can negatively affect your credit score. To increase your chances of getting approved for a motorbike loan, you’ll need to show you can keep up with payments.
If this seems daunting, ask yourself the following questions:
- Can I move my direct debits to a date after payday to ensure my debit account has sufficient funds to make payments?
- Are there any subscriptions that I do not use or tend to miss the most?
- Are there any borrowed amounts I can afford to pay off sooner?
- Can I calculate my motorbike finance prior to applying?
For that latter point, you sure can! Our motorbike finance calculator is great for providing an indicator of how much your monthly repayments could be. Always seek financial advice with the above, particularly if you’re struggling to keep up with repayments.
3. Reduce your credit utilisation
How much credit are you using? You’ll want to reduce it over time to show you don’t rely on credit to solely make payments. Again, financial advice from a professional is key here to ensure you don’t stretch yourself thin or make any risky financial decisions.
Ideally, you’ll want to keep your credit utilisation as low as you can, as this will show lenders you don’t heavily rely on credit for the majority of purchases.
4. Don’t apply for too much credit at the same time
We understand that you may be eager to apply for a motorcycle loan as soon as possible, but did you know that the more applications you make, the more it negatively impacts your credit score? By enlisting the help of a motorcycle financing broker, they can help carry out your soft search and recommend relevant lenders to suit your needs and financial circumstances.
5. Register for the electoral roll
Our last (but certainly not least) tip to improve is simply registering to vote. While this may seem unrelated, it actually increases your score, as it shows proof of address.
What credit score do you need to get a motorbike on finance?
In reality, there is no minimum score to get approved for a motorcycle loan - it will differ from lender to lender. However, some lenders may offer a better APR if you score highly, so this is something to take into consideration if you’d like to keep interest low. This is good news however for those who may have bad credit or are worried about their score not being high enough to be approved for a motorcycle loan.
How long does it take to improve your credit score for motorcycle finance?
Building your credit score can take time, regardless of whether it’s for a motorcycle loan or not. Taking out a loan and keeping up with repayments may increase your score overtime, so if you’re in a position where you’d like to finance your motorbike instead of buying outright, it may do your credit score some favours in the long run.