Can I lease a van with a bad credit score?
It isn't easy to arrange van finance if you have a bad credit score, but it is possible. We explain how you can do it...
Van leasing is one of the most popular ways to acquire a vehicle, but a bad credit score can make it difficult to get approved. There are things you can do to improve your chances, though, and we've explained the ins and outs of van leasing with bad credit below.
What do I need for business van leasing?
Lenders will want to know a number of things before they approve you for a van lease. Exactly what they want to see can vary depending on the firm, but generally, a finance company will want the following details:
If you're a business:
- At least three years' address history.
- A balance sheet, accounts history and proof of positive trading.
- Evidence of any County Court Judgements (CCJs).
- A full UK driving licence.
- A director that can act as a guarantor.
If you're a sole trader/leasing the van personally:
- At least three years' address history.
- At least three years' employment history.
- Details of your marital status and number of dependents.
- Recent bank account history showing monthly income and expenditure.
If the lender is happy that you can afford to lease a van at its rates, then it'll offer you credit, but may ask for more or different information before it does so. It may also turn you down if there are doubts that you can afford the monthly repayments.
Search for the best car and van leasing deals with What Car? leasing
Can I lease a van with bad credit?
There is no magic credit score number that says you can or cannot get finance for a van, because it's ultimately down to the finance company; some will be willing to lend money to people with a bad credit score, but others won't. However, the better your score, the greater your chances of a low-cost lease rate.
According to credit specialist Experian, a good credit score starts at 670, very good at 740 and exceptional at 800. A very poor credit score is 300 to 579, while a fair one is 580 to 669.
Can I make a joint application for a van lease?
It is possible for two people to apply for van finance together, which is known as a joint application. This usually happens when one of the two has a poor credit history, but the other does not, which increases the former's chance of successfully applying for a loan.
Some lenders will accept joint applications and some will not, so it's totally dependent on the finance provider.
Can I use a guarantor to lease a van?
It's sometimes possible to apply for van finance using a guarantor, which is when another person agrees to cover the cost of your repayments if it turns out you can't afford them. If you do this, the leasing company will usually ask to see the guarantor's financial information as well as yours.
A guarantor can strengthen your application, especially if you have a poor credit score or if you have not borrowed money before. Again, it's down to the individual finance company as to whether or not you'll be offered a guarantor loan.
Can someone else lease a van for me?
If you are the main driver or operator of the van, then it's generally best if the finance contract is in your name. However, it may be possible to arrange for someone else to lease it, but it's vital that everyone involved is clear and in agreement about exactly what is happening.
A business partner or spouse, for example, may be able to lease a van for you to use, although they will need a good enough credit rating to be offered the finance. It's important to make sure the contract allows other people to drive the vehicle (check with the lender if you're unsure about this) and always ensure that anyone planning to drive the van is fully insured before they get behind the wheel.
I can't get credit - what do I do now?
If your credit score is such that you cannot get finance for a van, the first thing to do is get a credit report. This will tell you exactly what your credit score is and point out what you need to do to improve it. There are various smartphone apps and online sources such as Experian and Equifax that will provide it for free.
If you've been turned down for van finance, don't make any further applications until you've attempted to improve your credit score, because further refusals can make matters even worse. Your credit report will help you work out what you need to do to improve matters, but there are some general things you can do to brush it up.
Registering on the electoral roll makes you more visible and acceptable to finance companies, and it's also a good idea to cut financial ties with other people who have a bad credit history. It sounds simple, but paying off existing debts will make a world of difference, as will increasing the size of your deposit.
For all the latest reviews, advice and new car deals, sign up to the What Car? newsletter here
Best family SUVs 2023
Want practicality, class and an elevated driving position in a relatively compact package? Then these are the top 10 cars you should be looking at – and the ones that are best avoided
Volkswagen ID 5 long-term test
The Volksagen ID 5 is intended to be a more stylish alternative to traditional electric SUVs – does it succeed? Our used cars editor is living with one to find out