Car finance with a low Centrix score
A low Centrix score does not close the door on a car loan, but it does narrow the options and can raise the rate. There is no single cut-off: each lender sets its own, and most also look at your income, your spending and the car. Nobody can promise approval.
The short answer
You can apply for car finance with a low Centrix score, and some lenders work with people whose files have marks on them. What you cannot do is predict the outcome from the number alone. Three things decide it:
- What is behind the score. A single paid default from years ago reads very differently from several recent ones.
- What you can afford now. Lenders have to check that repayments will not cause you substantial hardship, so income and spending count.
- The loan itself. The size of the loan, the deposit and the car all change the lender’s risk.
Nobody can promise approval. Lenders decide case by case. The rest of this page explains what the score is, how it differs between bureaus, and what to do before you apply.
What a Centrix score is
Centrix is one of three credit reporting companies in New Zealand. The others are Equifax and Experian (formerly illion). Centrix says its personal score runs from 0 to 1,000, where a lower score means a higher risk and a higher score means lower risk.
Centrix lists what feeds the score:
- the length of your credit history
- payment history, including on-time and late payments
- the amount you owe
- the types of credit you use, such as secured and unsecured
- recent credit applications and how often you apply
- defaults, judgments, debt repayment orders and insolvencies
It also says that having a lot of credit, or showing signs you may struggle to pay, can lower your score even if you have never missed a payment.
Centrix, Equifax and Experian are different
A lender can check whichever bureau it likes. Each one keeps its own records and uses its own scoring, so the numbers do not line up. A “600” on one report is not the same thing as a “600” on another, and the descriptions of what counts as good, fair or poor vary between bureaus and between editions of their guides.
For you that means two things:
- Do not judge yourself by a score you saw on a lender’s blog. Figures online disagree with each other. Use the bands printed on your own report.
- Check all three. An error or a missing payment might sit on only one file, and the lender you apply to may use that one.
See how to get a free credit report for the steps. Under the Commerce Commission’s guidance, you can ask any of the three for a free report and they should reply within 20 days.
What usually pulls a score down
- Defaults. A payment overdue more than 30 days and referred for collection. These stay for five years from listing, even after you pay in full.
- Judgments. Court judgments for unpaid debts, also held for five years by Equifax.
- Insolvency. Equifax says a No Asset Procedure or a single bankruptcy can be held for four years after discharge. Multiple insolvencies may be held indefinitely.
- Many recent applications. Equifax holds enquiries for four years, and a burst of applications can look like financial stress.
- Late payments. Repayment history is recorded for up to 24 months at Equifax.
- Very high card use. Using most of your limit can count against you.
- A thin file. If you are young or new to NZ, the bureau may have little to score. That is different from a bad score, and our page on car finance with no NZ credit history covers it.
If the marks on your file are defaults, see car finance with defaults and how long defaults stay on your credit file.
What lenders look at besides the score
The Commerce Commission says lenders review your credit report to assess risk and may decline you or charge a higher rate based on missed payments, defaults, current debt, recent applications and whether you pay on time. You can ask a lender for the main reason for a decline.
Beyond the report, a lender has to make reasonable inquiries so it is satisfied you can repay without substantial hardship. In practice that means:
- Income. Payslips, benefit statements or bank statements.
- Spending. Rent, bills, childcare, other loans.
- Stability. Time at your job and your address.
- Deposit. A bigger deposit means a smaller loan and less risk.
- The car. Its age, price and whether it is worth the loan.
Our page on what lenders look at for car finance goes deeper, and the guide on what credit score you need for car finance covers the numbers question.
A plan before you apply
- Get all three reports and read them line by line.
- Challenge errors. Contact the organisation that supplied the wrong item. It must investigate and fix errors, and the correction passes through to all three bureaus.
- Stop applying for credit until you have a plan. Each application may lower your score.
- Catch up on anything late. Current arrears hurt more than old marks.
- Pay down card balances where you can, so you use less of your limit.
- Save a deposit if you can. Even a small one reduces the loan.
- Work out what you can afford with the repayment calculator.
- Apply once, through a route that uses a soft check, so you do not stack up enquiries.
If you are not in a hurry, giving some marks time to age off may improve your position. If you are, a smaller loan on a cheaper car is usually the better lever.
A worked example
These numbers are illustrative only. They are not a quote or a prediction of what any lender will do.
Two people want the same $12,000 car with no deposit, over four years. Lenders price risk, so a person with a stronger file might be offered a lower rate than a person with a weaker one. Suppose, purely as an example, that rates of 12% and 22% a year were on offer.
| Stronger file | Weaker file | |
|---|---|---|
| Loan | $12,000 | $12,000 |
| Illustrative rate | 12% | 22% |
| Term | 4 years | 4 years |
| Monthly repayment (approx.) | $316 | $378 |
| Total repaid (approx.) | $15,170 | $18,150 |
| Extra cost over the term | about $2,980 |
The difference is about $62 a month, or nearly $3,000 over the loan. That is why checking your reports, fixing errors and putting down even a modest deposit are worth the effort before you apply.
Red flags
- Anyone who promises approval before seeing your income and credit file.
- A fee up front for “fixing” your credit score. You can dispute errors yourself, free, with the organisation that supplied them.
- Pressure to take the first offer without the total repayment in writing.
- A loan term that is much longer than the car will last.
- Many hard credit checks in a short time.
- Add-ons you did not ask for, such as insurance bundled into the loan.
Cheaper ways in
A cheaper car, a larger deposit, a shorter wait for old marks to age off, or a guarantor or joint borrower in a stronger position can all help. Read that guide first, because a guarantor takes on real risk. Free help is available from a financial mentor through MoneyTalks, and the Commerce Commission’s pages explain your rights.
How Fair Finance helps
Fair Finance is a referral service, not a lender, broker or financial adviser, and we give no personalised advice. One application and one soft credit check go to a panel of approved New Zealand lenders, each of which decides case by case. We are paid by the lender only if a loan settles, and that never changes your rate. Start with the quick check.
Checklist
- Free reports from Centrix, Equifax and Experian
- Every entry checked, errors disputed with the supplier
- Anything overdue brought up to date
- No new credit applications while you prepare
- Deposit amount decided
- Budget and repayment worked out
- Total cost in writing before signing
- Single application through a soft check
General information only, not financial advice. Bureau rules and lender policies change, so check the official pages below.
Sources
Common questions
What is a low Centrix score?
Centrix scores run from 0 to 1,000, and a lower number means a higher risk to lenders. Where 'low' starts depends on the bands printed on your own report and on the lender's policy, so there is no universal line. Check your report rather than relying on a figure from a website.
Is a Centrix score the same as an Equifax score?
No. Centrix, Equifax and Experian (formerly illion) each hold their own data and calculate their own score, and a lender can check whichever one it chooses. The same person can look better on one report than another, so check all three.
What Centrix score do I need for a car loan?
There is no set minimum. Centrix says providers set different thresholds, so one lender may accept an application at a score another declines. A lender will also look at income, spending, deposit and the car.
How long do marks stay on my credit file?
The Commerce Commission says payment defaults stay for five years even after you pay them in full, and most other information stays for about four to five years. Equifax lists defaults and judgments at five years, enquiries at four, and repayment history at up to 24 months.
Can I fix a wrong entry on my Centrix report?
Centrix says it cannot change an item itself. You contact the organisation that supplied the information, which must investigate and correct any error. If a credit reporter refuses a correction you think is justified, you can complain to the Privacy Commissioner.
Will applying for a car loan lower my score more?
It can. The Commerce Commission notes that many credit checks can suggest you are seeking more credit than you can afford, and each application may lower your score. That is a reason to compare carefully and apply once, rather than to many lenders in a row.
See your repayments, then get a fair rate.
One application, one soft credit check, no obligation. We match you to the lender most likely to give you a fair go.