What a combination to confuse the mind – hey? Im talking about the one two punch of both ‘Non Status’ and ‘Car Leasing’ in the same phrase! Well lets break it down and see if we can shead some light on the matter and try to help you understand what the heck we are talking about. Non Status Car Leasing is just one of the areas that consumers with a poor rating can look to use to drive a new or used vehicle in the UK without worrying about the stigma of being shown the door by getting declined.
Well Non Status in this case refers to your credit rating and essentially what is held on the central database that is often refered to as your credit file. As you might well be aware companies called credit reference agencies very kindly collect and store monthly bits of information on your financial activities – all for free! Amazing isn’t it… well maybe not. What happens is that your credit file will compose of any activity relating to finance agreements and normally covers the last 6 years time. This often shows as a 12 month overview of the accounts you hold such as Bank Loan, Car Finance, Mortgage or catalogue and what it gives in a instant is you outstanding balance, total amount borrowed and the key area – what you last 12 months repayment history has been like. Imagine 12 small circles for each month anda green one is good and means you paid on time – a red one , not so good and maybe you were or late or even spent the money on alcohol instead? Great – i hear you say – so what does this mean to me? Well any potential lender looking to give you more credit for something will simply view this credit record and see how you have behaved over the last few years and this info is often fed into a super computer program or some sort. If the computer or ‘underwriter’ decides you are unlikely to repay the loan or whatever it might be you are after then it will decline you – job done! Ok so where Non Status Car Leasing comes in is that the lender looking at your application uses a whole new set of criteria to decide if they should give you the money you want or need. In effect it doesn’t follow the path of high street lenders by associating repayment problems with a flashing red light or air raid siren and so will look at factors such as how traceable you are via items like the electoral roll and also if you can afford it! Its not rocket science and if you are spending more each month on a car than say half your salary it wont fit and this is where responsible lending comes into play. As a rule – Non Prime lenders will allow 25% of your monthly wage to go on a car payment but it can differ. For most this should be sufficient to drive the ideal motor and all that is required is a deposit.
Non Status lending – because it looks at current circumstances as opposed previous will also overlook big hitters like Bankruptcy, IVA, Debt management plans which is great news for millions of UK motorists with even late water bill payments now being on the decline list for mainstream finance companies looking to avoid any risk at all.