If you’re considering car finance, you might be wondering what credit score you need to get approved. The truth is, there’s no single minimum score, as lenders consider multiple factors beyond just your credit rating.
However, understanding how credit scores impact car finance can help you increase your chances of approval and secure a better interest rate. This guide explains:
How credit scores affect car finance
The typical credit score ranges lenders look for
What to do if you have a low credit score
Steps to improve your score before applying
1. How Credit Scores Affect Car Finance
Lenders use your credit score to assess risk and determine:
Whether you’ll be approved
What interest rate (APR) you’ll receive
How much you can borrow
A higher score typically means better finance options, while a lower score may result in higher interest rates or additional requirements, such as a larger deposit.
2. What Credit Score Do You Need for Car Finance?
There’s no universal minimum score, but most lenders use the three major UK credit reference agencies:
Approval is possible, but expect higher interest rates or a larger deposit.
May need to apply through a bad credit lender.
Very Poor (Below 561 Experian, 438 Equifax, 550 TransUnion)
Most mainstream lenders will decline, but bad credit car finance options exist.
A guarantor or higher deposit may help with approval.
Check your eligibility now to see what car finance options are available – Check Now.
3. Can You Get Car Finance with a Low Credit Score?
Yes, even with poor or very poor credit, it’s possible to get car finance. However, lenders may:
Charge higher interest rates to reduce their risk.
Require a larger deposit (e.g., 10-20% of the car’s value).
Ask for a guarantor – someone with good credit to back the loan.
If your score is low, choosing the right lender is key. Some lenders specialise in bad credit car finance, offering deals to those with financial difficulties in the past.
If you have bad credit, you know that securing car finance is just the first step. The next challenge is choosing a car that fits both your needs and your budget. With so many options out there, making the right choice can seem overwhelming. This guide will walk you through practical tips for selecting a reliable used car without breaking the bank – so you can drive away with confidence.
Why Choosing the Right Car Matters
For buyers with bad credit, your car is not only a means of transportation but also a long-term investment. A wise choice can:
Lower Monthly Payments: A more affordable car means lower monthly finance costs.
Reduce Total Ownership Costs: Beyond the purchase price, consider maintenance, insurance, and fuel.
Help You Rebuild Credit: Reliable, affordable transport supports stable employment and timely payments.
Before you begin your search, it’s essential to know what you can truly afford.
Monthly Payment Limits: Calculate what monthly repayment you can manage based on your income and existing expenses.
Upfront Costs: Factor in the deposit, any down payment required, and potential fees.
Total Purchase Price: Keep in mind that finance deals often mean you’ll pay more over time due to interest. Establish a realistic range for your overall car cost.
Quick Tip: Use our eligibility checker to see what finance options fit your budget—without affecting your credit score.
Step 2: Decide Between New and Used
For many with bad credit, a used car can be a more viable option.
Used Cars: Typically, used vehicles have lower price tags and slower depreciation, making them a better fit if you’re on a tight budget.
New Cars: Although new cars come with warranties and modern features, they usually have higher monthly payments and purchase prices.
Most buyers with bad credit find that a quality used car offers a balanced mix of affordability and reliability.
Step 3: Consider the Total Cost of Ownership
The sticker price is only part of the story. When choosing a car, look at the entire cost of ownership.
Insurance Costs: Some models cost more to insure than others.
Fuel Efficiency: More fuel-efficient cars can save you money in the long run.
Maintenance & Repairs: Research models known for reliability to avoid expensive upkeep.
Depreciation: A car that holds its value can be a better long-term investment.
Insider Tip: Create a simple spreadsheet listing the car’s price, estimated insurance, fuel costs, and maintenance expenses to see which models offer the best overall value.
Focus on vehicles with proven reliability records that are also popular among budget-conscious buyers.
Look for Reviews & Reliability Ratings: Trusted sources like What Car? or Auto Express often highlight models that balance affordability with dependability.
Check Mileage & Service History: Lower mileage and a full service history are indicators of a well-maintained car.
Consider Popular Models: For instance, models such as the Ford Fiesta, Vauxhall Corsa, or similar compact cars are known for lower maintenance costs and good fuel efficiency.
Remember: Reading owner reviews and expert advice can help you avoid models with hidden issues.
Best Budget-Friendly Used Cars in the UK:
Ford Fiesta – Cheap to insure, fuel-efficient, reliable
Vauxhall Corsa – Great for first-time buyers, affordable parts
Toyota Yaris – Known for long-term reliability
Honda Jazz – Excellent fuel economy, low running costs
Hyundai i10 – Small but practical, low maintenance costs
Step 5: Inspect and Test Drive
Even if the car appears perfect on paper, always inspect it in person.
Professional Inspection: If possible, have a trusted mechanic inspect the car to identify any potential issues.
Test Drive: Make sure the car performs well on the road, paying attention to the engine, brakes, and overall comfort.
Negotiation Leverage: Use any issues discovered as bargaining points to negotiate a lower price.
Tip: Don’t be afraid to walk away if something feels off. There are plenty of good deals out there.
Step 6: Leverage Finance Options to Your Advantage
Your car choice is closely linked to your finance deal.
Align Your Car with Your Finance Plan: Once you know your budget and car options, compare them with the finance solutions available to you.
Consult with a Specialist: At Motorly, we work with a range of lenders who understand the challenges of bad credit. Our experts can help you match the right car with the best finance offer.
Check Your Finance Options Now and get personalized advice tailored to your budget and credit profile.
Once you’ve found your ideal car, make sure you’re getting the best finance deal. Our guide on How to Apply for Car Finance with Bad Credit walks you through the process step by step.
Final Thoughts
Choosing the right used car on a limited budget is about more than just finding the lowest price. It’s about finding a vehicle that is reliable, affordable to maintain, and aligned with your overall financial strategy. By following these steps, you’ll be better prepared to make an informed decision that supports both your transportation needs and your financial recovery.
Remember:
Determine your total budget.
Weigh new versus used.
Consider the total cost of ownership.
Research reliable models.
Inspect and test drive.
Use finance options to your advantage.
Your credit score can be the difference between securing an affordable car finance deal or facing high interest rates and rejections. But even if your score isn’t perfect, there are simple, effective steps you can take to improve it before you apply. The best part? Some of these changes can start showing results in just a few weeks.
In this guide, we’ll break down five key strategies to help boost your credit score, making it easier to get approved for car finance at a better rate.
Why Your Credit Score Matters for Car Finance
Lenders check your credit score to determine how “risky” you are as a borrower. A higher score means:
Better approval chances
Lower interest rates (APR)
More flexible repayment terms
A lower score doesn’t mean you can’t get car finance. It just means your options may be more limited, and you might pay more in interest. That’s why improving your score before you apply can save you money and increase your chances of approval. *Before you start improving your score, it’s important to understand how bad credit car finance works – read our complete guide here.
5 Ways to Improve Your Credit Score Before Applying for Car Finance
1. Make Payments on Time, Every Time
Impact Timeframe: 30 – 60 days
One of the biggest factors affecting your credit score is your payment history. Even one missed payment can negatively impact your score for years.
What to do
Set up direct debits to avoid missing payments on credit cards, loans, or bills.
If you’ve missed a payment recently, catch up ASAP – some lenders won’t report late payments immediately.
Keep making at least the minimum payment on all debts (paying more is even better).
Pro Tip: If you’ve been late in the past, showing three to six months of consistent, on-time payments can help rebuild trust with lenders.
2. Reduce Your Credit Utilisation Ratio
Impact Timeframe: 30 days
Your credit utilisation ratio is the percentage of your credit limit that you’re using. A high utilization rate signals to lenders that you might be financially stretched.
Example: If your credit card limit is £1,000 and you owe £900, your utilization is 90% – which lenders see as risky. Lowering this below 30% can boost your score significantly.
What to do: ✔ Pay down existing balances if possible. ✔ Ask your credit card provider for a credit limit increase (but don’t use the extra credit). ✔ Spread balances across multiple cards instead of maxing out one.
💡 Did You Know? Lowering your utilization can increase your score in as little as one month!
3. Check Your Credit Report for Errors
Impact Timeframe: 1-2 months (depending on corrections)
Around 1 in 5 credit reports contain errors that could hurt your credit score. Even a small mistake – like an old unpaid bill you’ve already cleared – can affect your ability to get car finance.
What to do:
Get a free credit report from Experian, Equifax, or TransUnion. Look for errors such as:
Incorrect missed payments
Accounts that don’t belong to you
Outdated financial associations (like an ex-partner’s credit affecting yours
Dispute errors directly with the credit agency – they must investigate within 28 days.
Fixing even one error could add 50+ points to your score!
4. Be Strategic About New Credit Applications
Impact Timeframe: Immediate (avoiding damage)
Every time you apply for credit (loans, credit cards, store finance), lenders perform a hard search, which can temporarily lower your score. Too many applications in a short time can make you look desperate for credit.
What to do:
Avoid applying for new credit in the 3-6 months before applying for car finance.
Use soft search tools (like Motorly’s eligibility checker) that don’t affect your score.
If you’ve recently been rejected for credit, wait before reapplying. Instead, work on improving your score first.
Tip: Hard searches stay on your credit file for 12 months but have the biggest impact in the first 3-6 months.
5. Build (Or Rebuild) Your Credit History
Impact Timeframe: 3-6 months
If you have no credit history, lenders don’t have enough data to assess you – so they might reject you or charge higher interest rates.
What to do:
Get a credit builder card and use it for small purchases (paying it off in full every month).
Register on the electoral roll – this helps lenders verify your identity.
Put utility bills or a mobile phone contract in your name (and pay them on time).
💡 Fun Fact: Even a small credit card, used responsibly, can increase your score by over 100 points in 6 – 12 months.
How Your Improved Credit Score Helps You Get a Better Car Finance Deal
Making even small improvements in your credit score can help you:
Secure a lower APR (interest rate)
Increase your approval chances with more lenders
Get access to better finance deals
At Motorly, we specialize in helping people with all types of credit histories find car finance deals that work for them. Whether you’re actively improving your credit or need a solution now, we can help.
💡 Check Your Car Finance Eligibility – Without Affecting Your Credit Score!
Here’s a quick recap – tick off each step as you go.
✅ Set up direct debits for bills to avoid late payments ✅ Lower your credit utilisation to below 30% ✅ Check your credit report for errors and dispute them ✅ Avoid applying for new credit in the 3-6 months before car finance ✅ Build your credit history with a credit builder card or utility bills
Even if you can’t fix everything overnight, following these steps will increase your chances of getting approved for car finance on better terms
Improving your credit score doesn’t have to be overwhelming. By making small, consistent changes, you can boost your score, access better finance options, and save money on interest rates.
If you’re ready to explore car finance options, Motorly can help – even if your credit score isn’t perfect.
Get started today with our quick, no-impact eligibility check!
If you’ve been worried about whether your credit score will stop you from getting the car you need, you’re in the right place. Bad credit doesn’t mean you’re out of options. It just means you need the right information, and potentially the right specialist lender. In this guide, we’ll walk you through the essentials of bad credit car finance, explain what it is, how it works, and the steps you can take to improve your chances of approval.
What Is “Bad Credit,” Exactly?
When lenders talk about “bad credit,” they’re typically referring to a lower-than-average credit score. This score is a numerical rating that reflects how reliably you’ve paid back debts in the past. In the UK, credit reference agencies like Experian, Equifax, and TransUnion each use their own scoring systems. A lower score often signals to lenders that you’re at higher risk of missing repayments, which can lead to:
Higher interest rates (APR)
Tighter lending criteria
Requests for a deposit or guarantor
But here’s the good news – Bad credit doesn’t mean you’ll automatically be turned down for a car finance deal. Specialist partners (like Motorly) offer tailored solutions for individuals who may have been declined elsewhere.
Common Myths About Bad Credit Car Finance Debunked
Myth #1: “You Can’t Get Approved If You Have Bad Credit”
Reality: While a low credit score can limit some options, it’s not a blanket decline. Many providers specialize in subprime lending (finance for those with lower credit scores). As long as you meet certain criteria, such as a stable income, proof of address, and manageable debt levels, you can often find a deal.
Myth #2: “You’ll Always Pay Extremely High Interest”
Reality: Interest rates tend to be higher for bad credit loans, but not always “extremely” high. Different lenders have different approaches. Plus, if you show you’re taking steps to improve your credit (e.g., paying bills on time, reducing debts), you might qualify for a more favorable rate than expected.
Myth #3: “It’s Too Complicated to Apply”
Reality: While the process involves paperwork and checks, it’s generally straightforward, especially if you’re working with a reputable broker or specialist like Motorly. Gathering the right documents in advance can simplify the whole process.
Can You Improve Your Credit Score Before Applying?
Yes you can. Even small steps can make a difference over a few months:
Check Your Credit Report – Mistakes happen. Request a copy of your report from the main credit agencies and correct any errors you find.
Pay Bills on Time – Late or missed payments seriously hurt your score. Setting up direct debits or standing orders can help ensure you never miss a due date.
Reduce Existing Debts Where Possible – Lowering your credit utilisation ratio (the amount of credit you use compared to your total limit) can boost your score.
Register on the Electoral Roll – Being on the electoral register helps lenders verify your identity, which can marginally improve your creditworthiness.
Improving your score won’t happen overnight, but consistent effort can pay off in the form of lower interest rates or better loan terms down the line.
What to Expect in the Application Process
Documentation & Verification
Lenders will generally ask for:
Proof of Income: Recent payslips, bank statements, or tax returns if you’re self-employed.
Proof of Address: A utility bill, council tax bill, or bank statement matching your current address.
Valid UK Driver’s Licence: As basic identification and proof you can legally drive.
Lender Criteria
Income & Outgoings: Lenders evaluate your disposable income to gauge if you can handle monthly repayments.
Employment Status: Full-time, part-time, or self-employed. Lenders prefer stability, but that doesn’t always mean you need a 9-to-5 job.
Credit History: While past issues matter, recent positive financial behavior (like consistent on-time payments) can help your case.
Timeline & Decision
Some applications are processed within hours, especially if documentation is submitted promptly. Others may take a few days if the lender needs extra information.
How Motorly Helps Drivers with Bad Credit
At Motorly, we understand that everyone’s financial situation is unique. We specialise in connecting drivers with lenders who cater to a range of credit profiles, including bad credit or even those on IVAs (Individual Voluntary Arrangements).
Our Approach
Multiple Lenders, More Options: We work with a network of lenders that understand subprime finance, increasing your chances of finding a suitable deal.
Transparent Terms: We believe in clarity. You’ll know about the interest rates, fees, and any other details before you commit.
Final Thoughts & Next Steps
Having a bad credit score doesn’t mean you’re locked out of car finance forever. By understanding how your credit score affects your loan terms, taking steps to improve your creditworthiness, and choosing a trusted specialist provider, you can secure a finance deal that fits both your budget and your lifestyle.
Ready to Explore Your Options?
Whether you’re just curious about your eligibility or you’re ready to apply, Motorly is here to help.
All finance applications are subject to status, terms, and conditions. This article is intended for general informational purposes and does not constitute financial advice. If you require guidance specific to your situation, consult an independent financial advisor.
Owning a car in the UK offers unparalleled freedom, giving you the ability to manoeuvre as you please. But what if a blemished credit score casts a shadow on this freedom? Let’s take a closer look at how Motorly can help you get car finance with a less-than-perfect credit score.
Exploring Car Finance
Car finance refers to any financial product that allows you to purchase a car without having to pay the entire cost upfront. Common variants in the UK include Personal Contract Purchase (PCP), Hire Purchase (HP), and personal car loans. Now, let’s understand the role your credit score plays.
Unravelling Credit Score
Simply put, your credit score is a numerical reflection of your financial trustworthiness, drawn from your past fiscal conduct. Depending on the credit agency you use, it’s often marked as a score out of either 700 or 1000, with a higher score auguring well for credit approval at favourable terms. Conversely, a lower score could muddle your financing prospects.
Impact of Credit Score on Car Finance
When seeking car finance, lenders scrutinise your credit score to quantify the risk associated with lending you funds. This three-digit figure enables them to gauge your repayment capacity and propensity.
How a Poor Credit Score can Affect You
A less-than-perfect credit score may lead to a denied car finance application. Even if approved, you might face heightened interest rates, hefty down payments, or truncated repayment periods.
Securing Car Finance with Bad Credit: A Possibility?
Indeed, securing car finance with a poor credit score is challenging yet possible. Motorly are experts in Bad Credit Car Finance and can help you obtain the finance you need. Let’s delve deeper into this prospect.
Beyond Credit Score: Lenders’ Considerations
While your credit score is a key determinant, it’s not the be-all and end-all for lenders. They also weigh your income, employment tenure, and debt-to-income ratio. Despite a dented credit score, these favourable factors could still swing the approval in your favour.
Strategies to Secure Car Finance Despite Bad Credit
Even with an adverse credit score, there are tactics you can employ to enhance your car finance prospects.
The Co-Signer Route
Enlisting a co-signer with a robust credit score could amplify your chances of approval. Essentially, the co-signer pledges to shoulder the loan burden if you default on repayments.
Bolstering Your Credit Score
Elevating your credit score could significantly improve your car financing terms. Timely bill payments, reduced debt, and refraining from new credit enquiries are proven tactics to uplift your score.
Making a Substantial Down Payment
A substantial down payment shrinks the loan amount, thereby reducing the lender’s risk. Consequently, lenders might be more inclined to approve your application.
Opting for a Budget-Friendly Vehicle
Choosing a more economical car could minimise the loan amount, making approval more likely.
Selecting the Right Lender
All lenders don’t have identical criteria for car finance approval. Some specialise in catering to applicants with poor credit. It’s worth conducting thorough research to identify a lender that suits your situation. Motorly can help you find the right finance partner depending on you current circumstances.
So can I get a car on finance if I have a bad credit score?
To address the titular question: Yes, you can secure car finance despite a poor credit score. The journey might be a tad more challenging, with the terms not as favourable, but actionable steps can enhance your chances. Understand your credit score, strive to improve it, and carefully weigh your options.
Frequently Asked Questions
1. Is car finance feasible with a poor credit score?
Yes, it’s feasible but could involve more hurdles and less favourable terms.
2. What factors do lenders consider apart from credit score?
Lenders may also consider your income, job stability, and debt-to-income ratio.
3. How can I increase my chances of securing car finance with poor credit?
Consider employing a co-signer, improving your credit score, making a larger down payment, opting for an economical car, or identifying the right lender.
4. Can improving my credit score help me secure better car finance terms?
Indeed, an improved credit score can bolster your chances of securing car finance at favourable terms.
5. Are there lenders who specialise in car finance for individuals with poor credit?
Yes, certain lenders specialise in serving those with less-than-stellar credit. Conducting diligent research can help you find these lenders.
6. How long does it take to improve a bad credit score?
Improving a bad credit score takes time and consistent effort. It depends on various factors, such as the severity of your credit issues and your ability to address them. With responsible financial habits, you can gradually improve your credit score over time.
Ready to take the next step? Visit the Motorly Bad Credit Car Finance Page to find out more
If you have bad credit or an insufficient credit record, obtaining car finance may appear difficult, but there are choices accessible to you.
Struggling with a poor credit history and worried about getting car finance? However, don’t let this discourage you as there are options available to you. In this blog, we’ll guide you through your options and provide tips on how to improve your credit score to increase your chances of getting accepted for better finance deals.
Poor Credit Car Finance – what you need to Know
Applying for finance with bad credit history can mean that some lenders won’t offer you the money for your car, as they view you as more likely to miss payments. Poor or incomplete credit history might also mean you’ll have to pay a higher interest rate, even if you do get offered car finance.
It’s important to apply only for car finance that you’re confident you can repay because you can improve your credit score over time by paying off the finance on time and in full.
To increase your chances of getting accepted for a better finance deal in the future, you can improve your credit score by checking that the credit companies hold correct information about you, staying at an address for three years, building a history of paying back loans and settling any debts.
In the short term, don’t let a bad credit score get you down – there are still a few ways to get behind the wheel.
Can You Get Car Finance with Bad Credit?
It’s possible to get car finance with bad credit, as long as you’re reasonable with your needs. If you’re applying for finance on a vehicle that’s out of your budget or a bit unusual (think imported classic cars), you’re less likely to get accepted. Look at your budget and decide what a sensible choice is for your next car, and make sure you’ll be able to keep on top of the payments.
At Motorly, our lender partners can take you through your options if you’re struggling with your credit score.
Can You Get Car Finance with No Credit History?
If you’ve just turned 18 or you’re new to the UK and haven’t been able to build up any credit history yet, you might have little to no credit history. You should still be able to get car finance, but you might find that interest rates are higher, or you need to pick a lender who specialises in these situations. The good news is that if you keep on top of your payments, car finance will help you build a good credit report.
The Best Way to Get Car Finance with Bad Credit
Getting car finance with poor credit history is possible with a few adjustments. You might find that your monthly payments are higher, as interest levels might be raised, but there are ways to make it work.
Offer a larger deposit: You might be able to get lenders to agree to car finance if you offer a larger deposit, as this gives the lender added security. The higher the deposit, the less your finance company will need to lend you, and it’ll see this as a lower-risk deal.
See if you can add a guarantor to your finance agreement: Adding a guarantor to your finance agreement is a good way to minimize more of the risk for your lender, as they’ll know they have someone else there for security. If you don’t keep on top of your payments, your guarantor will be responsible for them. This way, the lender knows it has added security for getting its money back and can show that somebody close to you has enough faith in your finances to have your back. Guarantor loans are less common now, so you might need to shop around to find a finance provider that has this option.
Find lenders who work with bad credit: There are lenders out there who specialize in working with people who have poor credit, so it might be worth checking them out. Motorly can help you find the perfect Bad Credit Car Finance partner.
Overall, if you have a poor or no credit history, it may be more challenging to get car finance, but it’s not impossible. By taking steps to improve your credit score and making sensible choices when it comes to choosing a vehicle and lender, you can increase your chances of being accepted for car finance.
Remember to always stay on top of your payments, as this will help you to build a good credit report over time, which will be helpful for any future credit applications.
If you have bad credit and need to buy a car, you may be feeling overwhelmed by the prospect of finding the right car finance package. You may have heard all sorts of myths and horror stories about bad credit car finance, and you’re not sure what to believe.
The truth is, bad credit car finance is a viable option for many people, and there are many reputable lenders who specialise in working with people just like you with less-than-perfect credit.
In this article, we’ll debunk 5 myths about bad credit car finance and offer practical tips for finding the right lender and car. Whether you’re concerned about loan approval or being taken advantage of, we’ll provide the knowledge you need to make informed decisions. Let’s dive in!
Myth #1: Bad Credit Means No Car Finance
Many people believe that having bad credit means you won’t be able to get car finance at all. While it’s true that having bad credit can make it more challenging to find a lender, it’s not impossible.
If you’re struggling with bad credit, it’s important to do your research and find a lender who understands your situation. Be prepared to provide documentation of your income, employment, and other relevant factors that could help you qualify for a loan.
Remember, having bad credit doesn’t mean you’re out of options. There are many lenders out there who are willing to work with you, so don’t give up hope.
Myth #2: Bad Credit Car Finance Always Comes with Exorbitant Interest Rates
Another common myth about bad credit car finance is that the interest rates are always much higher. While it’s true that interest rates can be higher for borrowers with bad credit, they don’t have to be unaffordable.
You can also take steps to improve your credit score before applying for car finance. For example, paying down high-interest debt, making all of your payments on time, and disputing errors on your credit report can all help boost your score and make you a more attractive candidate for car finance.
Ultimately, it’s important to be realistic about what you can afford and not take on more debt than you can handle.
Myth #3: Bad Credit Car Finance Always Comes with Hidden Fees
Another myth about bad credit car finance is that lenders always tack on hidden fees that can make the loan even more expensive. While it’s true that some lenders engage in predatory practices, not all bad credit car finance packages come with hidden fees.
To avoid hidden fees, it’s important to read the fine print of any car finance package you’re considering. Make sure you understand all of the fees associated with the loan, including any origination fees, prepayment penalties, and late fees.
You can also protect yourself by working with a reputable lender. Look for lenders who are transparent about their fees and have positive reviews from other borrowers.
Finally, don’t be afraid to ask questions. If you’re not sure about a fee or don’t understand the terms of the loan, ask the lender to explain it to you in plain language.
Myth #4: Bad Credit Car Finance Will Damage Your Credit Score
Many people worry that taking out a car finance loan will damage their credit score even further. While it’s true that missing payments or defaulting on a loan can hurt your credit score, making regular, on-time payments can actually help improve it.
One way to protect your credit score when taking out car finance is to make sure you can afford the payments. Before signing on the dotted line, create a budget and make sure you can comfortably afford the monthly payments. Another way to protect your credit score is to make all of your payments on time. Set up automatic payments or reminders to make sure you never miss a payment.
Myth #5: You Can’t Car Finance with a Bankruptcy on Your Record
If you’ve filed for bankruptcy in the past, you may believe that you’re not eligible for car finance. However, this is another common myth.
While bankruptcy can have a negative impact on your credit score, it doesn’t necessarily mean you won’t be able to get a loan. In fact, many lenders specialise in working with borrowers who have filed for bankruptcy.
To increase your chances of getting approved for car finance after bankruptcy, it’s important to take steps to rebuild your credit score. Make all of your payments on time, pay down high-interest debt, and dispute any errors on your credit report.
Ultimately, filing for bankruptcy doesn’t have to be the end of the road when it comes to getting car finance. With patience, persistence, and smart financial choices, you can get back on the road to financial stability and get the car you need.
Are you struggling to secure car finance due to being in an Individual Voluntary Arrangement (IVA)? Buying a new car can be a daunting experience, especially when your credit history is less than perfect. However, at Motorly, we specialise in providing car finance solutions for those with a poor credit score, such as those in a Debt Management Plan (DMP) or IVA.
So What Is An IVA?
An IVA is a legal agreement between you and your creditors to pay back your debts over a set period, usually five years. This arrangement is suitable for individuals with unmanageable debt and can help prevent bankruptcy.
I’m In An IVA – Can I Get Car Finance?
If you are in an IVA, you may be wondering if you are eligible for car finance. The answer is yes, but it may require a few extra steps.
Your IVA provider will have strict guidelines for approving new expenditures, including car finance. However, if you can demonstrate that a car is a necessary purchase, such as for work or caring for a vulnerable person, it may be possible to get a car finance agreement approved. You will also need to show that the car is affordable within your agreed budget and will not impact your existing debt agreements.
Top Tips For Getting Approved When You Are In An IVA
Check your credit report: Before you start looking for car finance deals, it’s important to check your credit report. This will give you an idea of your credit score and what lenders will see when they check your credit history.
Decide on your budget: When you’re in an IVA, it’s important to stick to a budget. Determine how much you can afford to spend on a car each month, factoring in any other debts and expenses you may have.
Look for specialist lenders: Not all lenders will be willing to offer car finance to those in an IVA, so it’s important to look for specialist lenders who are experienced in dealing with people in similar situations. Motorly is one such lender, offering bad credit car finance and debt management car finance plans.
Consider a guarantor: If you’re struggling to find a lender who will offer you car finance, consider asking a friend or family member to act as a guarantor for the loan. This will give the lender added security.
Choose a car wisely: When you’re in an IVA, it’s important to choose a car that is affordable and practical. Avoid the sports cars and instead opt for a more modest vehicle that meets your needs without breaking the bank.
Be honest: When you’re applying for car finance, it’s important to be honest about your financial situation. Lenders will want to know about any outstanding debts or financial issues you may have, so it’s best to be upfront about everything from the start.
How Motorly Can Help
At Motorly, we can help you navigate the process and find a suitable car for your budget. We offer bad credit car finance and debt management car finance plans that enable people just like you to get behind the wheel of a new car. We understand that having a poor credit score can make it harder to obtain car finance, but with our expertise, we can help you find the perfect finance solution for your needs.
It is crucial to consider whether you can afford the car payments before entering into a car finance agreement. By taking out a car finance agreement, this debt will be added to the plan that your provider is managing, and you will need to ensure that you can afford to pay the payments consistently for the lifetime of the contract.
At Motorly, we are committed to helping people with poor credit scores find a car finance solution that meets their needs. Visit our Bad Credit Car Finance page to find out more about how we can help you get behind the wheel of a new car.
If you’re in the market for a new car and considering a finance agreement, it can be easy to feel overwhelmed. However, a less-than-perfect credit history shouldn’t prevent you from securing the vehicle of your dreams. Bad credit car finance can offer a solution for UK consumers, but the application process does come with its own set of challenges.
In this article, we delve into the common mistakes UK motorists make when applying for bad credit car finance and provide practical tips to help you navigate the process with ease. From not being honest about your income and expenses to applying for too many loans at once, we’ve got you covered.
If you are looking to take out a car finance loan, checking out your credit report is an important step. Your credit report is a record of your credit history, including your loan and credit card payments, outstanding debts, and other factors that impact your credit score. When applying for car finance, lenders use your credit report to assess your creditworthiness and determine whether you’re a high-risk borrower.
Unfortunately, many UK motorists fail to check their credit reports before they apply. By not checking, it’s easy to miss crucial errors and inaccuracies that could impact loan approval chances.
To avoid this common mistake, it’s essential to check your credit report regularly. Review your credit report thoroughly, looking for errors and inaccuracies, and dispute any inaccuracies with the credit provider. This will ensure that your credit report accurately reflects your credit history and increase your chances of getting your car finance application approved.
Applying for Too Many Loans at Once
Simply put, the more loan applications you submit, the higher the risk of a negative impact on your credit score. Unfortunately, many UK consumers make the mistake of applying for too many loans at once, without realising that it could hurt their loan approval chances.
To avoid this mistake, it’s crucial to limit your loan applications. At Motorly, we can help you with this. We search our panel of buyers to find out the best deal, even for those with fair to poor credit ratings.
Not Being Honest About Your Income and Expenses
When applying for bad credit car finance, you must be truthful about your income and expenses. Lenders use this information to assess your ability to repay the loan and determine whether you’re a high-risk borrower.
Sadly, some UK consumers make the mistake of inflating their income or understating their expenses. This can lead to loan approval problems. This is particularly true for bad credit car finance, where lenders are already cautious about lending to high-risk borrowers.
To avoid this mistake, it’s important to be honest about your income and expenses. Provide accurate and up-to-date information about your employment status, income, and monthly expenses, such as rent, utility bills, and other payments.
Additionally, consider creating a budget to manage your finances better and increase your chances of getting approved. By being truthful about your income and expenses, you’ll demonstrate to lenders that you’re responsible and reliable, increasing your chances of getting the car finance you need to finance your new car.
By avoiding common mistakes and making informed decisions, you can secure the financing you need to purchase your next car. Whether you’re looking to rebuild your credit history or simply find a loan with favourable terms, following the tips outlined in this article will help you achieve your goals.
So don’t let a poor credit history hold you back, start your journey towards a new car today!
