Q – I was hoping to take out a personal contract plan (PCP) for a second hand car purchase in my local car dealer’s garage. They came back to day and said I was refused. My credit is apparently not good. What do I do about this and where do I go now ? John – Rathmines D 6
A – Perhaps the refusal is a little present for you John – reality. All lending is based on the ability to repay. Generally as a rule of thumb, you should have no more than 35% of your Net Disposable Income ( NDI – that is your after tax take home pay ) on financial commitments to include home loans or rent, car loans, personal loans, family loans etc. The garage would be acting as an agent for a credit institution who in turn would have accessed your credit history with the CentralCreditRegister.ie – all loan transactions are recorded and any missed payment stays on record for 5 years while judgments stay for life. You can check your own credit history yourself – it’s free… just name address and date of birth and within 3 / 4 days you will receive a report. Your first port of call should be the institution that knows you best – your bank if you have an account with them. They will be able to work out if you are eligible to borrow and arrange accordingly. They also have the right to waive your blip if it is excusable. There are many deals from car manufacturers, some offering as low as 0% interest rate – or your local friendly credit union / post office should be your next port of call. They generally are more flexible than the average high street bank but in recent times, are experiencing greater pressures both from regulatory powers and bad debt fears. Safe driving.