Can you get Car Finance with Bad Credit?

What is a Credit Score?

Getting the right car finance starts with understanding your credit score. Think of it like a financial report card for lenders. This three-digit number reflects your creditworthiness, or how reliably you’ve handled borrowed money in the past, like loans or credit cards. 

A good credit score unlocks several benefits when applying for car finance: 

• Higher Approval Chances: A strong score makes it more likely lenders will approve your application. 

• Lower Interest Rates: The higher your score, the lower the interest rate you might qualify for, saving you money in the long run. 

• Larger Loan Amounts: With a good credit score, lenders may be more willing to offer you a bigger loan, giving you more options when choosing your car. 

If you need more detail, why not find out more about what a credit score is and how it works… 

Can I get Car Finance with Bad Credit?

There are plenty of options for bad credit car finance, which is it is designed for people with a less-than-perfect credit history who still need a reliable car. It understands that financial situations can change, and past mistakes shouldn’t hold you back. By considering lenders specialising in bad credit, you can get a loan for a car that suits your needs. This can be a great way to get back on the road, or simply regain some independence, all while rebuilding your credit score through consistent repayments. 

You can easily check your eligibility with our soft-search check that will not affect your credit score, or find out more about bad credit car finance. 

How to Improve Credit Score?

Many people ask how to improve their credit score. The good news is even small steps can make a big difference over time. Here are some key strategies to consider: 

• Become a Payment Champion: Make all your bills on time, every time. This includes phone contracts, utilities, and any existing credit agreements. Late payments can sting your score. 

• Get on the Electoral Roll: Being registered to vote helps lenders verify your identity and residency, which can positively impact your credit score. 

• Credit Management Matters: Don’t max out your credit cards and avoid taking on more credit than you can comfortably manage. Aim to keep your credit utilization ratio (the amount of credit you’re using compared to your limit) low. 

• Apply Strategically: Making numerous credit applications in a short period can be seen negatively by lenders. Try to space out any loan or credit card applications. 

• Fight the Errors: Get a copy of your credit report from all three major credit reference agencies and ensure all information is accurate. Report any errors so they can be corrected. 

• Consider a Credit Builder Card: If you have a limited credit history, a credit builder card can be a great option. Use it responsibly and pay it off monthly to build a positive credit footprint. 

• Mindful of Joint Accounts: Being linked to an account with someone who has poor credit could affect your score. Consider separate agreements if necessary.  

How Long does it take to Improve your Credit Score?

By following these steps, you can expect to see a positive change in your credit score within a few months. This paves the way for better rates and offers on all sorts of financial products, including car finance! Remember, improving your credit score is a journey, and CarMoney is here to support you every step of the way.