Whether you’re going on a trip or just waiting for your usual ride to be repaired, no one likes dealing with rejection from a car rental agency. Besides, how else are you going to get around?
Unfortunately, this happens to a lot of people who have a bad credit score or credit history. Even though agencies never publicise their minimum requirements, it has become a sort of unspoken rule that people with bad credit history would have a hard time renting.
Luckily, some opportunities have opened up to make it relatively easier for people still working on their credit to get a rental. Learn more about these options in this post.
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Renting with a Bad Credit History
Gone are the days that you have to go into shady, predatory deals just to have access to a rental car. Some non-reputable rental companies have been known to do this as they know their clientele have no choice.
But good thing their more reputable counterparts got in the game. Instead of closing off the opportunity to rent, companies instead employ various risk assessment strategies to come up with packages that would work well for both parties.
This is also what made it possible for people to finance a car with bad credit history. Whether you’re going to buy or rent, go with a company that’s transparent with its rates and fees. The fact that they give you a published estimate means that their rates are highly competitive.
What Are Your Other Options if Your Credit Score is Bad?
If you really have to rent a car but can’t find a deal that’s favourable to you, you may want to consider these options as well:
Borrow a Car from a Trusted Friend
One of the easiest ways to go around the rental issue is to borrow a car from a friend instead. This is highly recommended if you’re just going to need it for a short time.
In this case, the payment would probably be in cash. Just make sure that whatever agreement that both of you enter, have it in writing. So if any issue arises later on, you can always go back to the agreement as your reference.
More importantly, make sure to document the condition of the vehicle. Scratches and dents may have already been there even before you used them. The last thing you want to happen is to be stuck with the bill because you only noticed it after you returned the car.
Your friend may have plans. If this is something that you’re strongly considering, better tell them in advance. This would let both of you iron out the details without trying to beat a clock.
Have Someone Rent on Your Behalf
Will another person be with you on the trip? If their credit situation is better than yours, you should ask if they’re more comfortable putting the rental under their name instead.
Just make sure that they’d be there when they rent the car as most rental agencies require the renter’s physical presence before handing the keys. To make sure the signer fulfils the minimum requirements, consider prequalifying online. This would prevent delays during the trip.
Have Someone Cosign the Rental Agreement with You
If they’re not comfortable bearing the full responsibility of the rental, cosigning is a great option. This would vastly improve your chances of approval and getting a better deal.
Keep in mind that this is something you’d want to arrange in advance. If the agency still doesn’t approve the rental application, you’d still be able to look around. With time on your side, you’d most likely be able to find another rental for your trip.
The Best Long-Term Solution for All Credit Report-Related Issues: Work on Building Your Credit
Once you’ve paid late on something, it’s going to stay on your credit report for some time. There’s not much you can do about having it removed if the late payment mark is accurate. What you can do instead is focus on building your credit. Here are a few things that you may want to try:
Only Use Your Credit Card for Purchases You Can Afford
Missed payments stay on your credit report for a long time. If you’ve missed a few payments in the past, you probably know its impact already.
If you’re struggling with paying back your existing debt, don’t add to it as much as possible. That would only increase your interest charges, making it harder and longer for you to become debt-free.
As much as possible, stick to paying in cash. Better yet, leave your credit cards at home. This would help prevent the temptation of using credit for purchases.
Improve Your Credit Utilisation Rate
Even though credit history is just a component of the credit score, the score itself is seen as a general description of how good of a payer you are. That’s why it’s not just the credit history that you should be taking care of.
Credit utilisation rate is also a huge portion of your credit score. So if you want a quick way to raise your score, pay off a huge chunk of your debt.
If you’ve been making regular payments, talk to your lender about increasing your credit limit. They would likely agree as you have a good history of paying what you owe.
Report Errors on Your Credit Report
Mistakes happen. If your lender mistakenly reported a missed payment, dispute the mark. You’ll have to write and present evidence to make your case.
It may not seem like it’s worth it if you’re just disputing one mark. But when there’s a shortage of car rental, agencies would favour renters with a better credit history.
But if the only issue with your credit history is there isn’t much to it yet, just make regular and on-time payments on your loans. In no time, you’d have a decent credit history that will open more lending and renting opportunities as well as better rates for you.
