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HP? PCP? Credit Score? Answering the UK’s most searched questions on personal finance

Updated: May 8, 2023

The cost-of-living crisis continues to affect many taxi drivers and motorists within the UK and more people are choosing to use credit to pay for things. With the slump in the value of the pound driving further price rises, it’s leaving many with no choice but to apply for personal loans to get by.

From understanding how to check a credit score, to obtaining a car loan with bad credit, experts at Zuto Car Finance answer the most frequently asked questions that Brits are searching for when it comes to personal finance.

The following five questions were the most searched inquiries with regards to personal finance using Keyword Tool.

Can I apply for car finance with no credit history?

Google searches for ‘how to get car finance with no credit history’ increased by + 100% over the last 12 months

When a lender approves your car loan, they consider your credit score as a true indication of your ability to make payments on time. Unfortunately, having no credit history makes applying for car finance more difficult, but not impossible.

With this in mind, when you set up monthly bills to be paid via direct debit such as a utility bill or phone bill, it can reassure the lender that you will most likely make regular payments. Also, Buyers with little to no credit may have the option to discuss financing options with their lender, bank, dealership, or credit union.

How do I check my credit score?

Google searches for ‘how do I check my credit score uk’ increased by 125% over the last 12 months

You can check your credit score by visiting a free credit scoring website (such as Experian), but it’s important to pay attention to the terms before you make an account. Your credit card issuer or lender may also offer free of charge credit scores. Another complimentary option may be to visit a non-profit credit counsellor who aims to give you an understanding of how you’re doing credit-wise.

What is a good credit score?

Google searches for ‘what is a good credit score’ increased by +129% over the last 12 months

A good credit score is between 881-960 that is commonly used on the 0-999 credit score range. Scores between 961-999 are considered excellent, 721-880 is considered fair and anything below this is believed to be very poor. The higher your credit score is, the better chance lenders are likely to offer you loans with lower interest rates and other beneficial terms.

What is the difference between PCP AND HP finance?

Google searches for “is PCP or HP better” increased by +350% over the last 12 months.

PCP - Personal contact purchase requires drivers to put down a deposit first and then repay the finance in monthly payments. The instalments cover the estimated depreciation of the vehicle instead of covering the total cost of the car. When the contract ends, you can either return the car or trade it in for a newer model. A final ‘balloon payment’ can be made to own the car.

HP – Hire purchase allows drivers to buy either new or used cars. You will put down a deposit and the hire purchase will cover the rest of the car, paying monthly payments over an agreed period. You are effectively hiring the car from the lender. When you reach the end of the contract, you can then pay an option to purchase fee to become the full owner of the car.

What is APR?

Google searches for ‘what is APR in credit’ increased by +267% over the last 12 months

The annual percentage rate (APR) conveys the total cost of borrowing. The APR may vary among lenders, which is based on how they set their rates and the fees they charge. When taking out a car loan, make sure you are aware that your credit score and the amount you borrow will affect the APR.

Can I get car finance if I have bad credit?

Google searches for ‘Car finance in bad credit’ increased by + 213% over the last 12 months

Absolutely! Many people with poor credit get approved for car finance. In fact, lenders take into consideration not just your credit score, but other factors such as affordability, credit consumption and payment history. The benefit of car finance is having the option to pay affordable monthly instalments (plus any interest), that has been accepted by your lender. You can find out more about bad credit car finance via Zuto.


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