Expert says boosting credit score with car finance can help with future loans

A recent survey indicates that individuals in Great Britain are the least likely in Europe to consider their credit score. Indeed, nearly half of adults (46%) are unaware of their current financial rating.

Good creditworthiness can open doors to numerous benefits, including access to better borrowing terms, lower interest rates, and increased chances of successful loan applications. Latest statistics reveal that approximately one-in-five Brits have a poor credit rating.

However, there's a silver lining as there are several methods to enhance your score, including opting for car finance. Jonathan Such, head of sales at vehicle finance company First Response Finance, says it can bolster your credit score, establish credit history, create a positive payment footprint and more, reports the Daily Record.

It's crucial to understand that while this is a high-value purchase on credit, there are other ways to improve your credit score such as registering on the electoral roll.

One of the key advantages of opting for car finance is that it can help establish a longer credit history. This is particularly true for motorists who are new to credit or have a limited credit history.

Jonathan Such stated: "Buying a car is often one of the first significant investments you make, particularly if you've passed your test at a young age and are looking to hit the road as soon as you get hold of your driving licence. There's a chance that, at this stage of your life, you may have limited credit history - or no history at all.

"In this scenario, a car loan can kickstart your credit profile, making it easier for you in the future to obtain other forms of credit. In fact, length of credit history is an important factor in the eyes of a lender,