When you sign up for a car subscription, your chosen provider will usually perform a soft credit check to make sure you can pay for the subscription. A credit check involves looking at your credit history and credit score to see if you’re a reliable borrower. They’ll use this information to decide if you’re eligible for a car subscription.
A soft credit check won’t damage your credit score — but if your credit score is already low, this can limit your chances of getting a car on subscription. Learning how to improve your credit score can help you avoid this.
In this article, you’ll learn:
A good credit score allows you to access a wider range of products and services. You can get better rates on a mortgage or loan; get a car on finance or subscription; and banks and other companies will view you as a reliable borrower.
Research from Harvard Business School also suggests that good credit is linked with good health and wellbeing [1-2]. Often, the steps you take to improve your credit score involve reducing debt, which can lower your stress levels. Plus, you’ll be able to access products and services that are linked with a better quality of life.
There are 3 main credit reference agencies (CRAs) in the UK: Experian, Equifax, and TransUnion. Each CRA collects information about your credit history and creates a credit report. Based on this, they’ll give you a credit score.
The scores and bandings are slightly different for each CRA:
It’s important to track your credit score with each agency. A score of 720 is considered Poor with Experian, but Good with Equifax and TransUnion. So without context, a credit score doesn’t mean much.
As Money Saving Expert’s Martin Lewis explains, lenders don’t usually look at your credit score in isolation. Instead, they view your credit file as a whole, and use this to decide whether to lend you money or provide a service. 
Credit scores were created as a simple indicator of creditworthiness for consumers. You can view your credit score by signing up for each CRA individually, Alternatively, you can sign up to a free 30-day trial with CheckMyFile. After the trial expires, the membership costs £14.99 a month, and you can cancel online anytime. This will show you all your credit scores in one place.
Some companies will tell you which CRA they use to check your credit score. Of the main car subscription companies, Onto uses Equifax, while elmo and Care by Volvo use Experian. Other companies don’t reveal which CRA they use, so using a service like CheckMyFile can ensure you’re on track with all 3 agencies.
When you know what your credit score is, you can take the plunge and apply for your car subscription — or make a plan to improve your credit score.
If you’re eligible to vote in the UK, make sure you’re registered on the electoral roll. It’s a fast, easy way to improve your credit score, as it helps lenders quickly verify your name and address. Register on the electoral roll at the gov.uk website.
Using a credit card sensibly can help to show lenders that you’re responsible with money. Paying back what you owe in full and on time will help to improve your credit score and make you look more attractive to other lenders.
If you can,get a 0% interest credit card and use it to pay for small purchases. Otherwise, you can use a credit builder credit card which is specifically designed for those looking to improve their credit scores. Try to limit your spending to less than 5% of your credit limit, but definitely no more than 30%.
Make sure you pay off your credit card in full every month or at least meet the minimum monthly repayment. If you miss repayments, this tactic could actually harm your credit score.
Avoid defaulting on scheduled payments with your utilities companies, mortgage provider, or landlord. Consistently late payments can quickly damage your credit score.
Set up direct debits and/or standing orders to make sure your bills are paid promptly without you having to remember to make manual payments. Ensure you have enough money in your account to avoid unarranged overdraft fees.
If you have any loans (excluding your mortgage and student loan), try to pay these off before you start saving. Savings won’t show up on your credit report, but loans will — so prioritising debt reduction can help improve your credit score.
Some people report short-term drops in their credit score when they pay off a loan, especially if it’s the only loan on your credit report. But ultimately clearing the debt will reduce your debt-to-income ratio, which will boost your credit score.
There’s no need to close your bank and/or credit accounts, even if you don’t use them any more. Keeping accounts open creates a longer credit history, which gives CRAs a more accurate picture of your financial habits.
Payday loans are short-term loans that often have high interest rates. If you can’t pay them back on time, they can quickly spiral out of control, leaving you with more debt and a damaged credit score.
If you need emergency cash, try to borrow from friends or family or set up an arranged overdraft with your bank before turning to payday lenders.
Even small mistakes such as a misspelt address can affect your credit score. So check your credit report and get any errors corrected as soon as possible. You can contact the provider directly or ask the CRA for help. You can also add a Notice of Correction if there is negative information on your account, such as a missed payment, that you'd like to explain.
If your credit score is OK, you may be able to access interest-free credit cards. This means you can borrow money for free (for a set time) and prove you’re a reliable borrower. Just make sure you’ve cleared your debt before the interest-free period ends.
People with poor credit scores may not be able to access 0% interest credit cards. Make sure you know what your credit score is before you apply, as making applications that are likely to fail will further damage your credit score.
Borrowing more than you can afford may lead to county court judgments (CCJs), individual voluntary arrangements (IVAs), and even bankruptcy. All of these will have a significant negative impact on your credit for at least 6 years .
Avoid taking out more loans or credit cards to pay for existing debts. If you’re struggling with debt, charities like StepChange can help you manage it.
Fraud can leave an imprint on your credit report. If someone commits fraud in your name, the information will be stored on your credit file.
Avoid becoming a victim of fraud by using strong, unguessable passwords, and don’t use the same password for multiple accounts. If you notice unusual or fraudulent activity, report it to your bank and the CRA immediately. This can minimise the damage to your credit score.
If you’ve been rejected by one company based on your credit score, don’t immediately apply with another. Each hard credit check leaves a mark on your credit report; multiple checks can reduce your credit score.
If you’re declined based on your credit score, take the time to implement these steps and improve your credit score. This is much more likely to give you a better chance the next time you apply.
Credit score improvements don’t happen overnight. It can take a few months to several years to see significant changes. It all depends on the current state of your credit score.
Events like bankruptcy and CCJs will stay on your credit report for at least 6 years. It can be difficult to get credit during this time. But by taking these steps in the meantime, you can improve your score ready for when these expire.
Check your credit score for improvements every few weeks. Some platforms allow you to set up notifications so you’re alerted when your credit score changes.
It depends on the provider. Flexed is a good option for people with a low credit score, as they underwrite their own contracts. That means they may be more willing to consider drivers with a bad credit history. Some providers like Care by Volvo carry out a hard credit search, so if you're trying to book a car with them, you must be sure you want to go with them.
When it comes to soft credit searches, in our experience, most providers check your credit history that way so you have more flexibility when comparing different vehicle subscription services. For example Onto and elmo both won't run a hard search on your credit report. We have a detailed guide on vehicle subscription credit checks.
Personal contract purchase (PCP) car finance tends to have strict credit rules. They’re tying you into a long-term lease, so they want to be sure they’ll get paid for the duration of the contract.
Car subscriptions are usually issued on a rolling monthly basis, and can be cancelled at short notice. So the terms are usually more flexible when it comes to checking your credit score. This is one of the reasons to get a car on subscription instead of on finance.
However, car subscription providers usually perform a soft credit check (sometimes known as an “affordability check”) before they approve your application. Some may even perform a hard check - it’s ultimately up to the individual provider. Find out more about car finance vs car subscription.
Want to know how credit scores work when you apply for a car on subscription? Find out more about credit checks and car subscriptions.
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Vehicle subscription providers care about your credit history and will want to know if you can afford your car subscription repayments.