Can I get Car Finance with Bad Credit History?

Buying a car on finance is one of the most popular ways to get into the driving seat of a car.

Even with bad credit history, many people buy their vehicle by applying for bad credit car finance.

A poor credit score doesn’t have to stop you from borrowing the money to buy a car on finance.

Still, some lenders won’t approve applications for car finance with bad credit.

Even if you can’t get bad credit car finance with other lenders who have rejected you, all is not lost!

With a large panel of lenders, many specialising in offering bad credit car finance, there will hopefully be a deal for you.

Can I buy a Car on Finance with Derogatory Marks on my Credit Report?

Harmful entries on a credit report can give you a bad credit rating and remain for six years, but it doesn’t mean you can’t get car finance with bad credit.

Late Payments

Late payments on your credit report may seem minor. How can a few days late with an instalment affect my credit history? It shouldn’t. However, if you delay paying too long, you could set alarm bells off with your creditor. A mark on your credit report for a late payment might be sufficient to give you a bad credit rating, which is not a great idea when looking for car finance. Read how you can get car finance with late payments.

Default and Missed Payments

A Default happens when a lender closes your account because you have Missed Payments. A defaulted account means the creditor believes they have exhausted all chances of you returning their money. Read more about how you might get car finance with defaults or missed payments.


An IVA is an official agreement between you and your creditors to give you more time to repay your debts making things more affordable. Being in an IVA, you’ll likely have a bad credit rating; however, a big plus is your creditors cannot take other action against you, which stops them from taking out a CCJ.
When in an IVA, buying a car on finance remains an option, but it will likely be at bad credit car finance rates, which are much higher. Read how to get car finance with IVA.


A Debt Management Plan is an informal arrangement to help reduce your monthly repayments when you struggle financially, similar to an IVA but less restrictive. Although you can pull out of a DMP whenever you choose, unlike an IVA, your creditors can still pursue you outside of the DMP. Suppose you want to apply for car finance with a bad credit history while in an informal arrangement; it won’t be easy, but it is achievable. Read more about how to get car finance on a Debt Management Plan.


A lender usually issues a CCJ as a last resort to get the borrower to repay the money owed.
When a CCJ is entered on your credit file, it’ll stay for six years, after which it is removed even if you haven’t paid off the debt.
Car finance companies don’t offer loans with an outstanding unpaid County Court Judgement. However, your chance of getting car finance can significantly improve if you settle the debt. Read more about car finance with CCJ.


Most lenders won’t offer car finance for bankrupt people. Typically, you’ll get a discharge from bankruptcy after 12 months. The good news is that you can rebuild your credit rating. The more time passes, the better your chances of financing a car after bankruptcy.

Can I get Car Finance with No Credit History?

Unfortunately, not having a credit history will likely hurt your pocket and tie you to similar restrictions and interest rates to those who apply for bad credit car finance.

Why wouldn’t you have a credit score?

Typically you have either never had credit or not taken any new credit for some time.

You’ve not had any credit for over six years

Taking out different types of credit helps you build your credit history. When you close a credit account, it remains visible on your credit file for around six years. If you haven’t taken on any new credit within that time, you wouldn’t have a credit score.

You’ve never had credit!

You cannot get credit before 18 (UK). It’s no surprise if you’ve never used credit, you don’t have a credit history for the credit reference agencies CRAs to report.

Can I get credit with no credit?

Yes. However, buying a car on finance can be tricky if you’ve never borrowed money and have no credit history. Lenders cannot know how likely you are to make the repayments.

No Credit Check Car Finance

Credit checks are a necessary part of the car finance process to give confidence to the finance company and the borrower.

Be very wary of lenders claiming to provide no credit car finance. A bonafide car finance lender regulated by the Financial Conduct Authority will never offer finance without a credit check.

When you get a quote through us, the first credit check is a soft one which has zero effect on your credit. A hard check occurs with your authority only when you accept a quote and decide to proceed.

What is a Bad Credit Score when buying a car?

Car finance companies commonly use the term bad credit when advertising bad credit car loans. However, the CRAs don’t call it bad credit but poor credit.

How do I know if I have a poor credit score? 

Three credit agencies dominate the UK credit scores, each using a different scoring system. You don’t have one credit score. You have three!

Each CRA’s bandings for Poor/Bad Credit are as follows.

Poor credit bands

Experian 0 – 720

Equafax 0 – 438

TransUnion 0 – 565

Credit scores get reviewed weekly/monthly and can go up and down depending on how you manage your finances, so if you are in a poor credit score band, you can soon increase your score.

Check out ALL the credit scores from Experian, Equafax and TransUnion for buying a car on finance.

What Groups of People might Car Finance Lenders see as a Higher Risk for Car Finance?

Even with a good credit history, car finance companies might consider your situation a bad risk, which can typically happen to self-employed or those with an irregular income.

Car finance lenders see several groups as having a higher loan risk. You may face the same restrictions as people with bad credit, subject to your affordability.

  • Self-employed.
  • Young drivers.
  • Students.
  • Provisional licence holders.


Getting car finance for the self-employed has become easier than ever before. The increasing number of people working for themselves means that car finance lenders have become smarter at processing irregularly-income applicants. The take up of open banking is also helping get car finance for the self-employed with bad credit.

Young Drivers

As a young adult driver, there is no certainty you will or won’t get car finance. You’ll need a reasonable credit history to get car finance on your own; with no credit or bad credit history, you may need help. An Open Banking application could assist you, especially if you have good affordability but bad credit. Read the dedicated application page for young driver car finance to learn more.


Most students aged 18 and 22 haven’t had much chance to build up their credit history for car finance. Mature students should have an easier ride to getting car finance.
Car finance lenders want proof of regular income to support your living expenses and the financing and running of a car. Demonstrate you can afford to repay the loan (open banking can help), and you’ll likely get student car finance.

Provisional Licence Holders

Applying for car finance with a provisional licence can be challenging. Not many lenders offer car finance with a provisional licence. Finance costs are usually higher than with a full licence.
However, it’s not all doom and gloom. Some finance companies lend to provisional licence holders. However, expect a higher APR. You might also be set a limit on the sort (or size) of car you’ll be eligible to finance. Read up on car finance with a provisional licence.

Can I get Car Finance with Bad Credit History?  Apply now for a NO Obligation Quote with NO Impact on your Credit Score and find out.

7 Ways to Up your Credit Score and Increase the chance of getting Car Finance with Bad Credit

Should I Check my Credit Report before applying for bad credit car finance?

Checking out your credit score is something you should do regularly and especially before you apply for any significant finance. If you have a low credit score – you need to know.

Suppose you’re looking to get car finance and have a bad credit history. You’ll want to improve your credit as much as possible before you apply. It does not take long to boost your score, but it requires discipline.

What can I do to Improve my Credit?

  1. Are you on the electoral register at your current address? If not, simply registering will bump up your credit. Indeed many lenders will reject an applicant, not on the electoral roll.
  2. Check your credit report for mistakes. Errors do happen and can affect your score.
  3. Signing up with your Bank for Open Banking allows you to authorise lenders to view your bank transactions. Letting lenders see your spending and how you manage your money could swing a decision in your favour.
  4. Ensure your applications are accurate. Inaccuracies or omissions won’t help but may affect your getting credit.
  5. Make payments on time. If a direct debit or SO fails to go through, rectify it quickly, and you’ll probably avoid a missed payment cross on your report.
  6. Don’t use too much credit on your credit and store cards. If you max out your monthly limit, it may count against you.
  7. Don’t draw cash on credit cards. Multiple cash withdrawals may look to the lender that you’re struggling financially.

Soft and Hard Credit Searches Explained

On applying for bad credit car finance, the car finance process has two types of credit checks on your credit history that a lender performs.

Soft Search

When you complete the online form, – you apply to receive quotes – you are not applying for finance – that happens later. Lenders conduct a soft search on your credit report and decide whether to offer you a quote or decline your request. A soft search has no impact on your credit score.

Hard Search

Assuming you are successful and receive quotes if you decide to proceed and apply for finance, the lender does a hard search on your report. You’ll get accepted or a rejection. A hard search remains on your file for twelve months and can affect your score.

While you want to avoid getting declined, it’s also essential you don’t apply for too many applications at once, as this doesn’t look good on your credit history.

Can I Independently Buy a Car on Finance with a Bad Credit Score?

Can I buy a car with bad credit history on my own?

The short answer is yes, probably!

When buying a car on finance, most people do so independently. The application is in your name only.

With a low credit score, you’ll need your credit history is not great, and you need bad credit car finance; quite a few lenders specialise in offering car finance deals to people buying a car with a bad credit rating. Of course, there’s a catch!

With bad credit car finance, you’ll likely be limited to an HP car finance deal which might be OK. You’re unlikely to get offers for other types of car finance, such as a PCP deal you’d need to buy a new car.

You will have to face high-interest rates, put down a sizeable deposit, or be limited to a cheap car. While this isn’t ideal, it does get you a vehicle: assuming you can afford the monthly repayments.

Assuming you make all your repayments on time. Over time you could improve your credit rating when the contract is up. A higher credit rating sets you up nicely for future credit agreements, such as buying a new car or purchasing your first property.

But, suppose you can’t find any lenders to accept you for car finance. Don’t worry. You’re not out of options yet.

I have Bad Credit - Can I Get Car Finance with Someone Else to improve my chances?


Suppose you have a low credit score and can’t get car financing alone! Get some help!

There are two popular options you can go to.

You could take out a car finance agreement with someone you trust despite owning a bad credit score. It’s usually a parent or other family member who gets the call.

Suppose you have a low credit score and can’t get car financing alone! Get some help!

You could take out a car finance agreement with someone you trust despite owning a bad credit score. It’s usually a parent or other family member who gets the call.

It’s stating the obvious, but the other person can’t have a poor credit history! It won’t work!

Indeed they need a significantly better credit score than you and likely a higher income. It also helps if they’re a homeowner.

Taking out a car finance application with someone else will financially link the two of you. You must ensure they are aware of your bad credit profile before proceeding.

As well as benefiting from their positive credit ratings, you’ll be able to get a better car loan with a lower interest rate.

If you’re a young driver looking for a new car as your first purchase, applying with someone else will dramatically improve your chances.

What Kind of Car Finance can you get Buying a Car with a Bad Credit Score?

Typically with the car finance process, if you’re taking out a bad credit car finance loan independently, you’ll likely be looking at a Hire Purchase (HP) finance.

By buying a car with someone else on the agreement, you should be able to pick up an HP or Personal Contract Purchase (PCP) deal. These finance products are pretty similar.

Both require a credit check, and you’ll usually sign up for a three to five-year agreement.

HP Car Finance Deals

You’ll make monthly repayments on the car’s total value with the hire purchase deal. At the end of the agreement, you’ll own the vehicle outright. However, in the meantime, the car belongs to the finance providers- so you can’t go crazy with the mods or sell it!

Personal Contract Purchase Deals

A PCP is slightly different. You’ll still make monthly repayments over a contract period, but they won’t exceed the car’s total value. You can pay a balloon payment at the end of the car finance agreement.

A balloon is the ‘guaranteed future value of the car. Unfortunately, this is usually at least a four-figure sum! The benefit of PCP is your monthly car finance payments will be lower than with an HP.

The other options at the end of a PCP are to hand the car back and walk away or take out another PCP deal.

Should I get car finance with an HP or PCP?

We recommend you go for the HP deal if you’re confident you want to own the car at the end of the agreement.

If you’d instead change up your vehicle every couple of years, keep your options open, or want lower monthly payments, a PCP could be better.

A popular way to drive a new car is to lease a long-term rental, but you’ll require a good credit history.

Taking out a personal loan from the bank is also an efficient way with great benefits to getting car finance: however, this option is also likely to be closed to you if you have a poor credit rating.

Having no credit history can be worse than a bad credit rating

You might be wondering – how can you have a bad credit record as a young person who’s never had any finance?

Yep, it’s unfair, but the lender sees someone with no credit history as high risk. Simply put, the finance provider will find no evidence in their credit checks to show that you’re financially responsible.

That means buying a car on finance with bad credit as a young driver between 18-22 can be challenging.

Thankfully, it does get easier, assuming you start getting some credit history under your belt.

That can be as simple as buying an affordable mobile phone on a contract in your name or doing a grocery shop on a credit card once a month, and when payment is due, paying it off totally.

While this will help with buying something like a used car, it’s also crucially important for getting the best deals on future loan applications you might make in the future.

What Information is in a Credit Report?

Your credit report is almost like a school report card. It shows how you’re getting on at a glance, and it’s not always fair! Credit history is important at its most basic level as it enables the lender to confirm your identity.

It contains personal information, like your address history and even if you’re on the electoral roll (which is why it’s essential to ensure you are).

A credit report includes all the details about any finance agreements you have – including mortgages, car loans, credit cards, and even store cards.

The credit score you get on your report is a three-digit number. The higher, the better! A good credit score dramatically increases your chances of getting accepted for a car loan, credit card, personal loan, and more.

If you have a low credit score or other issues (like a county court judgment), you’ll have to lower your expectations: you’re likely to get poorer lending options than someone with a decent credit score.

Who Calculates my Credit Score?

There are three leading Credit Reference Agencies (CFA’s) for UK residents. These are Equafax, TransUnion, and Experian. They all hold data about you (which you can request to see at any time).

They each use slightly different scoring criteria, so it’s worth checking your credit score on all three to ensure your score is solid, as it’s often hard to tell what Credit Reference Agency the lender will use.

Why Use Us?

We aim to give more accessible access to the best car finance rates for your circumstances and borrowers who might not otherwise get accepted for a car loan.

A car is not a luxury. For many, it’s a necessity and something to be proud to own. Your vehicle is with you for shopping, school runs, trips out, or the children’s taxi service. You’ll get the best available deal from the panel of lenders, including specialist car finance lenders for bad credit. Also, you get a committed account manager to take you through the completion of the purchase.

Which Documents are Required when applying for Bad Credit Car Finance?
The paperwork can vary depending on what information the lender requires. Typically these are the documents you’ll need to provide.

  • Proof of driving licence
  • Proof of address
  • Proof of income

Can I Buy a Car with a Bad Credit Score?
Your credit score is essential, especially when buying a car on the best car finance agreement. Sadly, negatively impacting your credit score is easy to do.

Have you accidentally cancelled a direct debit, making your monthly payments late? Or went over your mobile limit and didn’t repay it right away? Even a couple of missed payments can devastate your credit score.

In many instances, people can have credit scores by doing nothing at all! For a finance company, an empty credit score is almost as bad as a negative one.

Fortunately, though, you’re not out of luck. There are options if you buy a car with a poor credit score. Read on to find out more!

Can I get Car Finance with a Satisfied Account on my Credit Report?


A satisfied account on your credit file means you have paid the outstanding amount in total, which lenders may see as positive.

Getting accepted for car finance is achievable, but you’ll pay a higher APR associated with bad credit car finance.

Rates from 19.9% APR: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £6,500 over 5 years with a representative APR of 29.9%, an annual interest rate of 29.9% (Fixed), and a deposit of £0.00, the amount payable would be £196.34 per month, with a total cost of credit of £5,280.14 and a total amount payable of £11,780.14.

We look to find the best rate from our panel of lenders and offer you the best deal you’re eligible for. We don’t charge a fee for our service, but we earn a commission. This does not influence the interest rate you’re offered in any way.

Autedia Limited is a credit broker and not a lender, authorised and regulated by the Financial Conduct Authority (Firm Reference Number: 948436). You can check the authorisation on the FCA Financial Services Register.