03 April 2020

Can I Lease A Van With Bad Credit?

How will my credit history affect my ability to lease a van?

With van leasing, you’re ‘renting’ a new vehicle that could cost over £20,000 to buy. You’ll pay a monthly payment that is not equal to the full market price. As the finance company is taking the larger risk, they need to verify you can comfortably afford the payments.

What happens if my business has bad credit?

If you or your company has a poor credit history, you may be required to provide further documentation to support your application for it to be approved. You could be asked to show recent bank statements or audited company accounts.

Will you look at my credit score?

Your credit score may be considered, in the same way banks and other lenders would to give credit to their customers. Our funding panel follows a similar process to assess the individual’s or company’s credit history. The credit score provided by the credit agency will look back across the past six years to review financial transactions related to any credit requests.

Although the parameters used by each finance company is different, in general terms they are looking for a high credit score. This helps to assure us that you are able to maintain other commitments without struggling to make the monthly lease payments.

One of the three main credit referencing agencies in the UK will likely be used to assess your credit file: Equifax, Experian or TransUnion.

Is there any other eligibility criteria for van leasing?

To be eligible for a van lease, your financial history won’t just be considered. Your company also must be one of the following:

  • Limited Company
  • Sole-trader
  • PLC
  • Partnership
  • Limited Liability Partnership
  • Charity
  • Embassy

New businesses that are under 12 months old additionally may be required to submit:

  • 3-6 months of business statements
  • A director’s guarantee (only applicable to limited companies)
  • An opening balance of the business account
  • If available, management accounts

Before applying for a business van lease with a poor credit score, ensure you can access this information, as it will allow you to receive a quicker decision.

Man in a van with 3 brown boxes.

How to improve my credit score?

If you know, or suspect, you have bad credit history, it makes sense to take some time to improve your rating where possible. Even if you decide not to apply for a van lease, it pays to improve your rating as this will help support your business in the long run.

Request a free credit report

You can ask for a free copy of your credit report at any time from companies such as Experian, Equifax or TransUnion. This will show some of the same information that is used to reach a decision about your business van lease application. If you notice any discrepancies, get in contact with the credit agency to have these changed as it could make all the difference.

Stay in the black

Having a healthy current account that stays in the black will also help your credit score. Avoid going into your overdraft and close down any old bank accounts that are no longer being used.

Pay bills on time

Even the non-payment of bills can have a detrimental effect on your credit rating. The easiest way to avoid this is to ensure you set up Direct Debits on each one so they are paid automatically and you are not charged for forgetting to pay on time

One loan at a time

Running a business can require you to secure several lines of credit at once. However, the risk you pose to lenders increases significantly if you have multiple loans at the same time. The way to avoid this is to take out one at a time and ensure this is paid back without any issues. It will improve your credit score by illustrating you are reliable and trustworthy when it comes to receiving credit.

If you are looking for a van for your company but are worried about the cost, see our special offers. We have great deals on big makes such as Mitsubishi, Nissan and Ford, so you can afford the right vehicle you need today.

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