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Consumers missing out on car of their choice due to underestimating their credit status -

pile of credit cards

Drivers typically underestimate their own credit-worthiness when it comes to buying a car on finance, meaning they could be missing out on their first choice of vehicle. research revealed half of people who assume their credit score will be poor actually turn out to be an average or good credit risk.

Even many so-called ‘prime’ finance customers - those with the very best credit records - underestimate how a lender might see them in terms of risk.

Less than a quarter of consumers with an ‘excellent’ credit score realise they are in the top category in the eyes of a lender.

Underestimating their own credit score can pose problems for consumers using online loan or finance calculators that ask for a creditworthiness guess.

It’s likely to mean worse interest rates and monthly repayments are initially offered than they’re really entitled to - and that could put them off going ahead with a purchase.

Analysis of BuyaCar customers in 2017 found that a majority of consumers underestimate their credit worthiness, with only 50% of those who think they are ‘poor’ correctly identifying their own score.

One in five customers with the highest credit score were found to believe they have a poor credit rating and less than 25% knew they have an ‘excellent’ score.

“Consumers often seem unduly modest, or even pessimistic, about their credit rating,” said Austin Collins, managing director.

“In the case of car buyers, a proper credit check is essential or they could miss out on the car that they really want - and can well afford - by underestimating their own credit score.

“Our analysis suggests that car buyers are best advised to take the guesswork out of their credit assessment.

“By leaving that to the experts they are likely to get a better car on more affordable terms than they might have assumed - and that’s a win for everyone.”

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