Can I Get Car Finance With a Bad Credit Score?

Is it possible to get car finance with a bad credit score? As you know, creditworthiness plays a significant role in getting car finance, and it can be super annoying when you get rejected because of a poor credit score. But what's the best next step? Do you change your immediate car-buying plans and work on improving your score, or are there alternatives? 

Does a bad credit score mean I can't get financing?

A bad credit score doesn't automatically mean you can't get car finance. However, your credit score is an important factor that lenders consider when you apply for car finance. Whilst it's not the only thing that financing companies look at, it can definitely help if you have a high credit rating before you apply for financing. If you're someone who's recently been rejected for car finance because of bad credit, then you can take some comfort in the fact that you aren't the only one. It's an issue faced by many, and we've written this guide detailing everything you need to know about getting car finance with a bad credit score to help you secure your next vehicle. 

What is a credit score?

A credit score is a number that represents your creditworthiness. The higher your score, the better your chances of getting approved for your loan or finance application. We've covered a fair bit about credit scores in our previous posts, in which you can check the credit score you need and if you're a young driver or recently moved to the UK and wondering whether you can get car finance without a credit history.

Having a bad or low score doesn't always mean you can't afford the repayments, and younger people in their twenties often have lower scores. This is because they haven't yet had the chance to build up a robust credit profile. But in a nutshell, a credit score is an important factor used by lenders to determine your creditworthiness. The higher your score, the more access you'll have to funds and lower interest rates.

Can I get car finance with a bad credit score?

The good news is that you can sometimes get car finance even with a poor credit score. The bad news is that there are fewer options available to you if your creditworthiness isn't in the higher echelons. The majority of lenders treat credit reports as the holy grail for making a lending decision, which can be frustrating if you have a lower score but can easily afford the loan repayments.

That means some lenders will reject your application, and you'll need to build your credit profile before applying with them again. It doesn't all need to be doom and gloom, however, and an increasing number of lenders will consider more than just your credit report. 

How to apply for car finance with bad credit?

When applying for car finance with lenders, it's handy to do some research and see their lending requirements first. Some lenders will flat-out say they don't lend to people without a good credit report, whilst others may offer you finance with higher interest rates. 

Essentially, it's up to you to decide on an option that fits, and you shouldn't agree to any fixed payments where you could have trouble paying back the amount borrowed. Before signing a car finance agreement, fine-comb over the terms and conditions and make sure that you're happy with the agreement. 

How do I improve my chances of getting approved?

It usually takes at least 12 months before you start seeing improvements in your credit score, and it can often take years. However, you can still improve your chances of getting car finance with a few quick fixes to your score and doing some research on the market. 

Research Your Credit Report

Check your credit score before you apply for finance, as it's worth knowing the ins and outs of your report. There are plenty of companies that offer free credit reports, all of which use scores from Experian, Equifax and TransUnion. You have the right to request a free statutory report from any one of the free major companies. Alternatively, you can pay a monthly fee to Experian or Equifax for a deeper dive into your report. 

Get on the Electoral Register

Being on the electoral register means you can legally vote, which boosts your credit score significantly. You'll need to contact the local authority and fill out a form, registering at your current address. The local council will then update your details on the system, and this should be added to your credit report within 30 days. 

Keep Up with Payments

Falling behind on payments is one of the worst things you can do if you want to borrow. It stays on your credit report, and companies may decide against lending to you if you've defaulted on payments at any time in the last three years. Always contact the company you owe money to and try to find an amicable resolution if you're struggling to pay any bills. 

Pay a Substantial Deposit

The higher your deposit, the lower the amount needed to borrow. If you're in a position to pay extra upfront, lenders may look more favourably on and as they believe you're a lower risk. Alternatively, some lenders will allow you to use a guarantor who takes on any debt you may incur with the lender. 


Having bad credit doesn't need to end your car-buying dreams; there are options on the market to help you find the right finance. And that means you can buy a car without any stress and enjoy all the perks of owning a new set of wheels.  

Before applying for car finance, make sure you research your credit report. Once you know what your credit score is, take a look at some of the ways in which you can look to improve your credit score

Get Car Finance with Carmoola

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