'You're not alone' squeezed-out borrowers assured

A fear of rejection is driving more professional people to seek out non-prime motor finance, according a major lender to those with impaired credit records.

The Funding Corporation believes that a growing number of its customers are those who realise that an application to a mainstream lender for car finance is likely to be declined.

That's because even minor blemishes on a credit file, such as a few missed credit card or mobile phone payments, can now add up to the rejection of a loan request it says.

Now the company is seeking to assure such customers that they are far from alone in possessing a higher salary which is accompanied by a low credit rating.

A general practitioner, a university professor and a commercial airline pilot are among those who have recently approached The Funding Corporation for help to buy a car.

The company, recently named "Responsible Lender of the Year" by Credit Today, says those with concerns realise that a refused application could damage their credit status even further.

"For this reason, they often de-select themselves from high street lenders rather than have an unsuccessful credit search show up on their file," said Richard Cox, Head of Motor Operations.

"If we are able to accept them for finance, then they get the loan they need and the opportunity to start repairing their credit record by keeping up repayments," he added.

The Funding Corporation, said Richard, finds that an increasing number of applicants likely to be considered a bad risk by other lenders are younger professionals.

"In these cases, we look more closely at the reasons for any past difficulties and the likelihood of any issues recurring, as well as the person's ability to service the loan," he said.

"Often we find that there is no evidence of a chronic repayment problem, but simply past lapses which have since been remedied and are unlikely to reoccur.

"Negative information generally stays on a credit file for up to six years, during which time a younger person might have developed a more mature attitude to managing their money.

"Such people need to know that they are not alone in being haunted by the past, and that second-chance lenders such as ourselves can bridge the gap back to mainstream borrowing," said Richard.