Can I buy a car with a poor credit score?
Yes! You can buy a car with a poor credit score, but you may have to pay a higher APR or need a family member or friend to be your Guarantor
Do you have a Poor credit score?
The best place to check your credit rating is with one of the Credit Reference Agencies CRA such as Equifax.
Poor credit score will usually indicate you have:
- Missed repayments.
- Defaulted on loans.
- CCJ’s against your name.
You can buy a car with a poor credit score (in your name), but the cost of the borrowing will be higher.
How to get car finance with a poor credit score
If you’re reading, be assured there are many young drivers (and not so young) with a Poor credit rating and several car finance companies offer loans to such drivers.
Choosing a car finance company that initially does a “Soft Search” is to help protect your credit score.
Providing you can meet the following criteria you could get car finance:
- Aged 18+
- A credit score of between 225 and 350 (a Poor credit rating on the Equifax chart).
- A minimum monthly take-home salary of £1000.
- 12 Month employment history.
- You must have registered on the electoral roll at your current address.
What if you have not applied for credit before?
When you apply for credit first time, you will start with a Low credit score.
Getting a good credit history is something you have to build up over time, so things like getting finance to buy a car might not be as easy as you would hope.
If your credit rating is not sufficient to take out car finance on your own, you could apply for Guarantor car finance.
What if you get a decline for your finance application?
You may still buy a car despite a Poor credit score but would need to get a Guarantor car loan.
A Guarantor car loan will be more expensive, and you will require someone to guarantee the repayments.
How do you improve a bad credit rating?
There are some easy ways to improve your credit rating for car finance.
- Apply for your credit report; find out what information is held by the CRA’s before you make an application for credit. If you have already had an application declined a Credit Report will help you establish. Why?
- If your name is not on the electoral roll at your current address, you won’t get credit!
- If you get declined, don’t make repeated applications that could only make matters worse but instead establish why you got declined for credit.
- Only make complete and accurate applications. Inaccuracies or omissions may affect you getting credit.
- When you are successful for finance, make the payments on time to build a good credit history.
A Soft Search is best for your credit file!
When you apply for credit, the Lender will either make a Soft or Hard search on your credit file. Ask the Lender what type of credit file search they will carry out.
A Soft search on your credit file is not visible to other lenders so if declined it won’t show in your credit file.
A hard search will go on your credit report and to regularly be applying and getting a refusal for credit will affect your credit score.
Are you on the Electoral Roll?
You won’t get credit if your name is not on the electoral roll at your current address. (A credit report will confirm if you are on the register).
Get on the Gov.UK Electoral Register here.