Do You Need a Good Credit Score to Subscribe to a Car?

Rhian Jones

Jan 9, 2023

Credit & Criteria

The short answer is yes, but it depends on multiple factors which we'll cover here! Credit checks are completely normal for renting, leasing and financing a vehicle. Although with a subscription you don't own the vehicle, you are agreeing to a contract that is based on the value of the vehicle you choose. Wagonex customers will need a credit check to give our car suppliers an indication of whether you're suitable to drive one of their vehicles.

We'll cover the following questions:

Why do you need a good credit score for a subscription?
Will a credit check impact my credit score?
What credit score is likely to be accepted?
How do you check your credit score?

Why do you need a good credit score for a car subscription?

Credit checks are quite common in the world of car rental and financing and this is no different for subscription. There are a few reasons why our partners need to carry out a credit check when a customer makes a vehicle request:

To assess financial responsibility: We need to ensure that our customers are capable of making timely payments on their subscription vehicle. A credit check provides insight into an individual's credit history including payment patterns or any County Court Judgements (CCJs). It also helps our partners to evaluate the risk associated with the customer and make an informed decision about whether to enter into a financial agreement with them.
Minimising risk: By carrying out a credit check, our vehicle suppliers can minimise the risk of default or non-payment. A good credit score and positive credit history indicates that you're more likely to be able to make your subscription payments, reducing the likelihood of financial losses.
Preventing Fraud: Credit checks can help companies identify potential instances of fraud or identity theft. Along with identity checks, a credit check helps us to ensure customers are providing accurate and legitimate information. This helps protect both the company and the customer from fraudulent activities.

Will a soft credit check impact my credit score?

A soft credit check is a way to check an individual's credit report without impacting their credit score. Unlike a hard credit check. A soft credit check is typically conducted for informational purposes or as a pre-qualification step.

One common example of a soft credit check is when you check your own credit report through a credit monitoring service or a credit bureau's website. This allows you to review their credit information, including payment history, current debts, and any negative or derogatory marks. These self-checks are essential for monitoring credit health and detecting any errors or fraudulent activity.

So the answer is no, a soft credit check will not impact your credit score as it won't leave a visible trace on your credit report that's visible to other lenders or creditors. This means that getting a soft check for a subscription vehicle will not affect your credit score. By empowering individuals with knowledge about their credit, soft credit checks promote financial awareness and responsible borrowing.

Will a hard credit check impact my score?

When a lender performs a hard credit check, it can have a temporary negative impact on your credit score. Hard inquiries occur when you apply for credit, such as a loan, credit card, or mortgage. Subscription can often be seen as a form of loan as you are driving a car that you don't own, so some of our partners may need to do a hard check depending on individual circumstances. These inquiries are visible to other lenders and can affect your credit score because they suggest you may be taking on new debt.

The impact of a hard credit check on your credit score is usually minor and temporary. It might cause your score to drop by a few points, but it should recover relatively quickly, especially if you manage your credit responsibly by making payments on time.

Overall, while hard credit checks can have a short-term impact on your credit score, they are a normal part of the credit application process and are unlikely to have a significant long-term effect if managed responsibly. If you have any concerns about the credit check process, please get in touch with a member of our team.

What credit score is likely to be accepted?

Unfortunately there is no magic number when it comes to the perfect credit score for a vehicle subscription. There are a number of factors that can influence our partners decision to accept a vehicle request such as the cost of the vehicle, the ability to provide additional documents where required or insufficient address history for example. The acceptance criteria can vary from supplier to supplier but if you are rejected for a vehicle our customer service team can provide more information on why this might be.

If you know your credit score and it's on the low end, it might be difficult to get a car on subscription. The better your rating, the more likely it is that you'll be accepted. With a good to excellent score, you'd still need to pass affordability checks but stand a better chance of subscribing to a larger number of cars on our website.

Your credit score isn't the only factor, it's just an indicator used to see if you've historically paid your debts. We understand that you might have just changed jobs, had a financial event change your bank statement, or have additional income that isn't covered in your credit score, that's why our suppliers use other factors to gauge your affordability and may ask for additional documents to support.

If you have a lower credit rating here are some ways you can improve your score.