Can I get car finance through if I have a bad credit score?

Roman Danaev

So, you have made a decision to purchase a new car but you have got a poor credit score and you’re worried that this will affect the chances of being approved for a car loan. may be able to help you. We have a panel of specialist lenders, many of whom are experts in helping people with a bad credit score to get accepted for vehicle finance.

When you make an application, the lenders check your credit score and make a decision based on your credit whether they want to offer you a car loan or not. The most important thing the car finance lenders need to see is that you can afford your monthly repayments and will not default your finance facility.

To calculate your affordability, will do some affordability checks on you. We will ask you about your income, expenditures and your employment. We’ll use this data to perform what’s called a soft credit search on your file.

If the checks we conduct show that you can afford a car loan, we’ll match you with the best deal from wide range of finance packages we have available from our panel of lenders.

Why does my credit score matter?

This is because lenders want to know your current financial background, so they will check the amount of credit you’ve had in the past, how much credit you currently owe to other finance companies, banks and credit cards and how good you are at making repayments.

They’ll use this data to make a decision in principle on whether they could potentially offer you car finance or not. Having a bad credit history is not necessarily because you’ve missed repayments – you can have a bad credit score because you have never had credit in the past. This means that lenders have nothing to compare with, so they wouldn’t know how good you will be at making your bad credit car loan monthly payments.

Man sees he's got an excellent credit score rating on his mobile phone

Your APR and monthly payments

There is one thing you need to remember when you apply for car finance with bad credit score. You’ll see that the rates you’re offered might be higher than rates that are offered to motorists with good credit rating. In case you have bad credit and need finance, you might need to ask your partner or family member to be your guarantor or join you to do a joint application. They would need to have a better credit rating that you.

Representative example on a typical bad credit application:

The Representative APR is 26.9% (fixed) so if you borrow £10,000 over 4 years at a flat rate of 13.86% p.a. (fixed) the total charge for credit will be £5,544.31 You will pay 48 monthly payments of £330.73 per month and repay £15,544.31 in total.

How to prepare for car finance application

  • Evidence of your address;
  • Latest payslips to indicate a continuity of income. If you’ve recently changed jobs, a letter from your employer might also be helpful;
  • Copies of your bank statements, accounts or tax returns if you’re self-employed;

Your next step is to fill in the application and get your personalised car finance offer.

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