Last updated September 29th, 2023
The term ‘credit score’ refers to the 3-digit number (ranging from 0-999) that indicates your past reliability for repaying borrowed money. It is calculated from a level analysis of your credit files.
Banks and other credit brokers (including car dealerships) use credit scores to gauge the level of risk associated with offering a loan or finance.
Therefore, it is far easier to get approval for car finance with a good credit score. If you have a poor credit score, this doesn’t mean you won’t be able to borrow money for the car you’re after – but some lenders may not approve you.
In this guide, we will cover how a poor credit score affects your ability to secure car finance - and your options for financing a car with a bad credit rating. We’ll also explain how to find out your credit score – and list some helpful tips for improving it.
Poor credit history can affect your ability to get car finance in various ways. For example, some lenders might not offer you finance because they feel you’re likely to miss payments.
What’s more, having a poor credit history might mean that you’ll face higher interest rates if you are accepted for car finance.
Therefore, it’s a good idea to carefully review all the car finance options available to you - or explore other solutions, such as part exchanging your car on finance.
Whilst it is certainly possible to get approved for finance with a bad credit score, you should be aware of some of the challenges this can present.
Some lenders simply won’t approve you for finance, whilst others may increase the level of interest on your car finance. (Credit lenders may use the latter method to deter prospective customers with poor credit ratings.)
If you are unsure how much financing a car might cost you, try our free car finance calculator.
You will have a better chance of being approved for car finance with bad credit if you:
If you have a poor credit score, this might mean it will take you longer to secure the credit you need.
Unfortunately, there is no set timeframe for securing car finance with a bad credit history. However, following the tips above to improve your credit score will put you in better stead to get approval.
There are three main credit reference agencies in the UK. Their credit score boundaries are as follows: