January 23, 2021

Can You Buy a Boiler on Finance With a Bad Credit Score?

To apply for finance for a brand new boiler, get a free, fixed quote today!

Can You Buy a Boiler on Finance With a Bad Credit Score?

At iHeat, you can purchase a brand new boiler and installation through a range of payment options including finance and Buy Now, Pay Later.

What’s in this article?

When you apply for finance through our acting credit broker LeadsUK Ltd t/a iHeat, your application is subject to approval and a credit check.

Having a poor credit rating won’t affect the APR on your iHeat finance package but it may affect whether you are approved for finance or not.

Our finance lenders, Vendigo may offer additional packages if you don't get approved initially at a different APR. Alternatively, speak to your bank to weigh up taking a loan out in order to purchase your boiler.

What is a Credit Score?

Your credit score is a number that is calculated based on your credit report that takes into account your payment history on loans and credit cards, how much revolving credit you frequently use, how long your accounts have been open and what types of accounts you have.

This score is the number that lenders use to determine whether or not they will grant you a credit card, loan or finance.

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Our finance provider, Vendigo, has a high acceptance rate, however, if you think your credit rating is less than fair then it may be worth checking your credit score on a free website such as Experian.

Most credit rating agencies have categories for determining whether your credit score is excellent, good, fair, poor and very poor.

Credit Score Example Table

The following table shows how Experian rate your credit score:

Excellent

Good

Fair

Poor

Very Poor

961 - 999

881 - 960

721 - 880

720 - 580

300 - 579

If your credit score falls into the Poor or Very Poor categories, there’s no need to panic. There are ways in which you can improve your score and whilst it might take time, the sooner you tackle it, the sooner your rating will go up.

Tips on How to Improve Your Credit Score

1. Register to vote

Ensure you are registered to vote at your current address on the electoral register. This improves your score as it helps to confirm your name and address, making it easier for lenders to identify you. Visit GOV.UK to find out more about registering to vote.

2. Pay your bills on time

By paying your bills on time, you are proving that you are reliable and good at managing your finances, therefore making you more appealing to lenders.

3. Pay off existing debts

Before applying for new credit, you should attempt to pay off any current debts you have because lenders may be reluctant to lend you more money (even through finance plans) if they can see you already have a lot of debt.

4. Don’t borrow more than you can afford to pay back

If you are unable to pay your debts you can get into trouble that eventually leads to Country Court Judgements (CCJ), Individual Voluntary Agreements (IVA) or bankruptcy.

Not only will these have a detrimental affect to your credit score, but they also stay on your credit report for up to six years, meaning you will find it very difficult to get finance.

5. Avoid high-interest loans

The higher interest the loan you take, the more you’ll have to pay back. If you find yourself struggling to pay back loans due to the high added interest, you could end up getting in trouble.

By choosing loans with lower interest, you’re at less risk of coming into trouble and are more likely to be able to pay it off on time.

6. See if you are linked to someone else

If you have a joint account with a spouse, family member or friend, their credit rating will be linked to yours.

This could affect your personal rating, so you will have to close or transfer any joint accounts that could be letting your score down. Once you’ve done this, you can ask credit reference agencies to add a notice of dissociation on your report, which will prevent your former associate’s credit score from affecting yours in the future.

7. Check your file for any mistakes

Even the smallest mistakes could affect your credit score which is why it’s so important to ensure all the information is correct. If you notice any incorrect information, be sure to report it straight away.

8. Check your file for fraudulent activity

If you notice any mistakes on your file that are incorrect or look suspicious, such as credit you haven’t applied for, this could be someone committing fraud by using your name. Not only is this fraud, but it could also be having a detrimental effect on your score.

9. Utilise less of your credit

Credit utilisation is how much of your credit limit you use. E.g. If you have a credit limit of £3,000 and you use £2,250 of that, your credit utilisation is 75%.

Generally, the less available credit you use, the more positively lenders will view you because it makes you appear more reliable and better at managing money. If possible, aim to keep your credit utilisation below 25% to improve your credit score.

10. Don’t apply for credit through multiple lenders at once

Every time you apply for credit, the lender will run a ‘hard inquiry’ on your credit report. Each time a hard inquiry is run, your credit score could be lowered by as many as 5 points. When multiple inquiries are run in a short time period, it could be lowered even more.

My Credit Score is Still Low, Now What?

If your credit score is still low, you may need a guarantor. A guarantor is someone who signs an agreement that says they will repay the money if you are unable to. If you do decide to use a guarantor, you should make sure the person you choose has a good credit score as they will also have to share their personal details for a credit check.

I Keep Being Refused Credit

If your applications for credit keep being rejected, there are some other things you can do to be able to purchase a new boiler.

Apply for the ECO3 Free Boiler Scheme

The ECO3 Scheme was set up by the government in a bid to help homeowners in England, Scotland and Wales who need assistance with heating their home. Under the scheme, the six largest energy providers must aid the installation of energy efficient measures such as wall insulation, loft insulation and gas boiler replacement.

For more information on eligibility and how to apply, visit boilerfunding.org.uk.

Find Other Ways to Raise Money

If you can’t obtain the funding through finance, you could get help elsewhere such as via benefits, a charity or fundraiser. Alternatively, you can try to save money by cutting out unnecessary spending. For more advice on how to save or raise money, visit the Citizens Advice Bureau.

To apply for finance for a brand new boiler, get a free, fixed quote today!

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