In pursuit of car credit finance with a bad credit record?

Roman Danaev

If you’ve been unlucky enough to acquire a bad credit record, getting car finance is likely to prove more than a headache — you either meet with outright rejection or you find yourself paying an unacceptably high price for the privilege.

What is bad credit?

Every time you take out a loan or arrange any type of borrowing, you create a record with one of the UK’s credit reference agencies — Experian, Equifax, Crediva and CallCredit.

The file maintained by the credit reference agency charts the way in which you manage the borrowing. Late payments or failure to make a payment when it falls due is noted on your file — and adversely affects what is commonly called your credit score.

If your defaulting on repayments eventually leads to your being declared bankrupt, or a county court judgment (CCJ) is made against you, or you enter into an Individual Voluntary Arrangement (IVA) in an attempt to manage your debts, you inevitably acquire a bad credit record.

This bad credit record is then revealed whenever you apply for new credit and the lender makes a check with the credit reference agencies about your credit score — as any lender is obliged to do.

At, we understand that you may have experienced financial difficulty in the past, but that it shouldn’t mean you get refused bad credit car finance. Our aim is to find you cost-effective bad credit car finance that will help you get your new car and get on the road.

In the meantime, there are ways you can improve your credit score.

How to improve your credit score

The good news is that, however bad your present credit rating, you don’t have to be stuck with it for life. Not only are records expunged after six years, but there are also many ways in which you may improve your record over time:

  • make sure you are on the electoral roll — it’s used to check your identity;
  • cancel any credit cards or other lines of credit you are not using — new lenders become wary of your access to more types of credit, even if you are not currently using it;
  • make sure you are up to date on all outstanding bills — such as mortgage repayments, Council Tax, gas, electricity and personal loan and credit card repayments;
  • check your credit history to make sure that there are no inaccuracies and that records of defaults you have subsequently repaid are removed from your file; and
  • take a leaf from the Money Saving Expert’s book and look upon any credit application you make as something like a beauty parade — your objective is to make yourself appear as financially attractive to any lender as you can.

Credit applications

When you make a formal application for credit, not only does the lender search your credit history, but if the application is turned down, this is also noted on your credit file, adversely affecting your credit rating and making future applications even more difficult.

A wise precaution, therefore, is to ask your finance broker (such as ourselves) to conduct a “soft search” or “quotation search” as it is more formally known, rather than a formal “credit application search”. The soft search acts as a kind of pre-clearance mechanism where a snapshot is taken of your current financial circumstances in order to assess the likelihood of any formal application succeeding.

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