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Bad Credit Car Finance: What You Need to Know

April 25, 2016

If you’re feeling the weight of your bad credit score, there’s hope for you yet. By finding the right provider for your car finance, bad credit doesn’t have to hold you back – and we’re going to show you the range of flexible finance options available regardless of your credit rating.

bad credit finance

 

What’s killing your credit rating?

When it comes to a bad credit rating, the cause can be any number of contributing factors – and diagnosing the problem is the first step towards finding a fix. Car finance for bad credit holders does exist – so no matter what’s making your score suffer, there are always options available.

Credit score killers include:

  • Late payments: your payment history accounts for a substantial 35% of your overall credit rating – and late payments are just one of the financial faux pas that can hurt your score
  • Missed payments: ignoring credit card payments altogether is a sure-fire way to negatively impact your credit rating, and can ultimately lead to your account being charged off
  • Loan defaults: defaulting on a loan indicates an unwillingness or inability to fulfil your end of a contract, which can be reflected in your credit rating
  • Bankruptcy: filing for bankruptcy can be a credit score killer and should only be considered as a last resort, although options are still available for drivers in this position
  • High credit card balances: your level of debt determines your ‘credit utilisation’ – and as that rises, your credit rating falls
  • Closing credit cards: the length of your credit history is one factor contributing to your overall credit score – and closing old credit cards, cards with outstanding balances and cards with available credit remaining is detrimental to your score
  • Credit applications: while applying for finance is often necessary, making a number of credit applications within a short time frame will hurt your credit rating – as these inquiries make up 10% of your score

Need bad credit car finance?

Finding car finance with bad credit can be a nightmare, especially as some lenders are opposed to giving customers credit when they have a poor track record.

The good news is that many companies are happy to provide bad credit car finance regardless of your circumstances – meaning there are still plenty of options to choose from whatever your situation.

Credit score aside, you can find affordable car finance even if you have:

  • Missed payments: your credit score may be suffering as a result of missing or defaulting on payments – but bad credit, no deposit car finance is still available regardless of your rating
  • CCJs: contrary to popular belief, a County Court Judgment (CCJ) doesn’t need to stop you from finding finance. Depending on the timeframe, many providers can arrange car finance for bad credit holders, even when they have CCJs to their name
  • IVAs: if you’re currently under an Individual Voluntary Arrangement (IVA), or have been previously, you could still be eligible for a loan – although providers will need a letter of permission from your Insolvency Practitioner if you are in an IVA right now

Car finance: bad credit, no deposit

Bad credit car finance is no different from any other kind of car loan – finding a decision is quick and easy and you won’t be asked to pay a deposit. Choosing a car finance provider who’s experienced in helping customers find car finance with bad credit means you’ll get the best interest rates available – on top of expert support and advice surrounding the world of poor credit car finance.

At The Car Loan Warehouse, we specialise in helping customers find flexible finance options whatever their circumstances – and by choosing us for your car finance, bad credit doesn’t have to be a burden.

Try our online car finance calculator to find your rate or head straight over to our bad credit car finance page to explore your options today.

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About The Author

Jon Le Roux is co-founder and company director of The Car Loan Warehouse. Being a mad engineering and motorsport enthusiast, I spend more hours than is healthy, watching, reading or talking about cars, boats, motorbikes…..basically anything with an engine.