If you have a bad credit score rating, then you have probably found it difficult to obtain anything from a cell phone contract to a vehicle loan. Regardless of affordability, regulatory institutions in South Africa have a mandate to only provide credit to people who have a good to fair credit rating.
The good news is that the right rent-to-buy a car finance plan is available to you even if you have a less than stellar credit score rating.
What is a Rent-to-Buy a Car Finance Plan?
A rent-to-buy finance plan is a vehicle that is given to people under specific agreements:
- You will need to pay an upfront deposit and show proof of income,
- You will be paying for the car as if you are renting it,
- But, after the fixed term has passed a portion or all of the money you paid towards renting or leasing the car can be used towards buying it.
This agreement can help your poor credit rating in a number of ways:
- Credit Score
When taking out a loan with a bank, if you are unable to make a payment on your car loan then this would negatively impact your credit score. At Earn-A-Car, you have options, to either trade down and get a vehicle that costs less per month and fits within your budget or discuss alternate repayment options that won’t impact your credit score at all.
Another benefit is that there isn’t any interest because you aren’t being loaned money for a car, you are essentially paying a rental fee that will be used towards the purchase of the car at a later stage.
South African legislation entitles you to obtain your credit report free of charge from every credit bureau, namely TransUnion or Clearscore to name a few, every year.