Can I get car finance with bad credit?

If you need to buy a car, it can be tougher if you have poor credit but it is achievable, and we're here to explain how.

Car finance is the most common way to buy a new or used car in this day and age and is becoming increasingly more popular to do so.

More than 90% of new cars are purchased using a car finance plan and it can be invaluable for those that don't have a vast amount of savings to buy the car outright.

Other positives of car finance are you can spread fixed monthly payments - typically across 24-48 months - and you can have the option to own it outright at the end of your agreement by paying off the balloon, or handing it back to the finance company.

It can also entice you to go for a more expensive car due to not having to pay for it all in one go. But that of course is dependent on your needs, budget, and offers loans.

The three types of car loans available are Personal Contract Purchase (PCP), Hire Purchase (HP), and Personal loans, and you can see what the pros and cons of each are by visiting our previous article on the topic below.

We've also created an article on the things you need to consider before taking out a deal, which you can view below.

However car finance is largely dependent on credit history and the credit score you have accumulated over time, and unfortunately for some, once the background checks have been done, they may be refused a loan from the finance company.

Essentially, car finance companies need to be sure that you will be able to repay the monthly fees, which also accumulate interest, and if in the past you have missed payments, or had to terminate finance contracts, it could critically affect you.

If you have a current car finance deal, Car Credible can give you a free appraisal and help you keep track of it every month, while updating your car's depreciation value and equity position. Check it out by following the banner below.

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If you unfortunately do have a bad credit score or no credit whatsoever, it can make it more challenging to be approved, but it is still possible.

You can compare your options using various comparison websites and auto lenders on the internet and apply based on their advice as to how likely you would be to be accepted.

The key though is to be tactical with your approach and types of credit. Don't apply for as many as you can because if you are rejected, it will appear on your credit history which could further reduce your chances of being approved in the future.

You can review our previous article on credit scores and credit history and exactly what each of them means by visiting our previous article on the topic below.

If you have a 'bad' credit score, it's a good idea to investigate a little bit more into what that actually means. Using a free copy credit check service should allow you to get some further insight into where your active credit limit is now, where you may have missed payments in the past, and those that are financially linked to you.


Always ensure your details are accurate and do not misrepresent you. This can include your occupation, salary, current credit cards, and whether you have, or need a guarantor.

Misleading credit check services and credit scoring models will only bite you on the backside in the future and could be another blow to you when trying to secure credit. 

Lenders actually never see your credit score, but they do have access to your history and credit report and will use these scores range to determine whether they feel like you could be a good borrower.

It can be quite time-consuming applying for credit but it will be worth it when you finally do secure what you need to buy the car of your dreams.

But prior to that, you may be offered high-interest rates, poorer lending options, or be rejected altogether.

But fortunately, there are many ways that you can get a good credit score yourself by following some of the below tips.

Pay debts off as soon as you can

It may seem like a very obvious answer, but if you are using a credit card, the sooner you pay it off and the more months that go by without you missing a payment, the sooner you'll be approved for that credit.

It's key to only use credit accounts if you are certain you can pay them off because that could cause you to spiral into insurmountable, crippling debt if you are building credit up and are unable to repay it.

Increase your deposit when buying

If you do have a little bit of savings tucked away somewhere, it might be a good idea to put down a little bit more of a deposit when buying your new car, as this will result in you borrowing - and paying - less over time.

It can also boost the confidence in credit lenders that you will be able to pay them back if you show you have a bit more cash to put down in the first place.


Register on the electoral roll

Your name and address will be the first thing online lenders look for when deciding whether to approve your loan payment, and it makes the process easier for them if you are on it.

Remove yourself from bad credit situations

You may have had a joint account with someone in the past that you are no longer associated with that has since gotten themselves into bad credit and your name is still being linked to their history.

If this is the case, you'll need to issue a notice of disassociation, at which point credit lenders should be able to remove this person from your file and clear the poor history against your name.

If you have a current car finance deal and have good or bad credit, Car Credible can help break down your monthly outgoings by giving you access to a free, personalised dashboard that allows you to see the situation you're in whenever you need to. We also send monthly notifications to update you on your ongoing position. 

If this sounds like something that could be helpful for you, click through the image below and get yourself signed up today.

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Having a bad credit score isn't the be-all and end-all. Yes, it may seem frustrating and disheartening if you go to apply for credit and are rejected, but there are so many services out there that can help you.

The best chance you have is not spending beyond your means. Create a budget every month that documents your expected outgoings and try to put a little bit of extra money aside in case of emergency.

You can also use your credit card to make smaller purchases, such as a cup of coffee or even your weekly shop, and then pay it off immediately, as this shows that you can pay off the debt quickly, even when it's just debt you would have normally spent on your debit card.

Little things like that can go a long way in improving your overall credit score, so give it a try and let us know if you notice any positive changes.

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