How to get car finance when you have a bad credit

Car finance is the most popular way that Brits get a car now with over 80% of us paying for our cars in monthly instalments. However, if you have a poor credit score getting approved for credit applications, especially the bigger stuff such as a car, can be much for tricky. That is why we have put together the top tips you need to follow to getting car finance with bad credit.

What are the car finance lenders criteria?

There are no standard criteria you can fulfil that will guarantee you an approval. However, there are certain factors you must be able to fulfil to be eligible for finance in the UK. These are:

  • You must be at least 18 years old
  • Have lived in the UK for a minimum of 3 years
  • Be free from bankruptcy
  • Can prove your affordability

The last point there, proving your affordability is extremely important. Lenders will never approve you for car finance if they have doubts that you won’t be able to meet your repayments. You yourself do not want to get into this issue either, you will only end up in debt with a depreciating asset and a horrendous credit file.

Minimise chances of being declined

One of the most important things you can do when you’re applying for credit is to minimise your chances of getting declined. Going to a bank or what is known as a ‘prime lender’ to get your car finance is only going to result in getting refused if you have a very poor credit rating. This is problematic as getting declined for car finance leaves a negative mark on your credit report, making your credit file worse and reducing the likelihood of the next lender approving you further.

You, therefore, should apply to a bad credit car finance specialist who is well equipped in underwriting and lender negotiations to help you get the most suitable approval. You should also be mindful of not applying to lots of companies at once. It’s difficult as we are always told to shop around to get the best deal. The problem with car finance is lenders often perform a hard search, which leaves a mark on your credit file. Simply by doing this they are notifying anyone else who look as your credit, such as future lenders, that you applied. Lots of these and lenders will gain the impression that you are desperate for credit which will create concern over your affordability. You could get declined on this alone. As a result, research companies first, look at reviews and choose the company you think is best suited to you. If you get approved but you’re not thrilled with the interest rate, you can then try and find a car finance company with a better suited lender panel. The approval won’t hurt you, a decline will.


If you have a county court judgement (CCJ) then this can count against you with many car finance providers. The best thing to do is wait for this to drop off your credit report. Typically, 12 months should suffice, in the meantime work hard on improving your credit file. Pay for everything in full and on time every single month to be confident that the next time you apply for credit it won’t be too harmful to you.

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