Getting Car Finance with Bad Credit: Your Questions Answered

Updated 12 March 2025 | First Published 13 August 2024

Table of Contents

1. Can I Get Car Finance with Bad Credit?

2. What If My Credit Score Is Very Low or I Have a CCJ?

3. What’s the Minimum Credit Score for Car Finance?

4. What Credit Score Do I Need with Experian or Other Agencies?

5. How Can I Improve My Chances of Approval?

6. Checklist: Steps to Take Before Applying

7. Why Choose Compass Vehicle Services Ltd?

8. Frequently Asked Questions

Can I Get Car Finance with Bad Credit?

Yes, it’s possible to get car finance even with bad credit. Many people worry that a poor credit score will automatically disqualify them, but that’s not the case. However, there are some important things to keep in mind:

• Higher Interest Rates: Lenders may charge more interest to offset their risk.

• Lower Loan Amounts: You might be offered a smaller loan, so consider realistic car choices.

• Stricter Terms: Lenders may require a larger deposit or additional documentation.

Tip: Don’t be discouraged. Many lenders specialise in helping people with less-than-perfect credit.

What If My Credit Score Is Very Low or I Have a CCJ?

Can I Get Car Finance with a Score as Low as 200?

While there’s no official minimum credit score for car finance, a score as low as 200 will make things more challenging. Approval is still possible, but:

• You’ll likely face higher interest rates.

• Your choice of lenders may be limited.

• You may need to provide a larger deposit or a guarantor.

Can I Finance a Car If I Have County Court Judgements (CCJs)?

A CCJ on your credit file doesn’t automatically mean you’ll be rejected. However:

• Some lenders may decline your application.

• Those who accept may offer less favourable terms.

• Demonstrating recent financial stability can help your case.

What’s the Minimum Credit Score for Car Finance?

There isn’t a universal answer. Each lender has its own criteria, but here are some general guidelines:

• Used Car Loans: Often available to those with scores around 600 or higher.

• New Car Loans: Typically require a higher score, closer to 730.

• Specialist Lenders: Some work specifically with people who have poor or limited credit history.

Pro Tip: Always check if a lender offers a “soft search” eligibility check, which won’t affect your credit score.

What Credit Score Do I Need with Experian or Other Agencies?

No lender uses only one credit reference agency or a fixed score. Your Experian, Equifax, or TransUnion scores may differ, and each lender interprets them differently. Instead of focusing on a specific number, aim to:

• Correct errors on your credit report.

• Build a record of on-time payments.

• Reduce outstanding debts.

See also: What’s Credit Score Do You Need To Lease A Car In the UK?

How Can I Improve My Chances of Approval?

Follow these actionable tips to boost your likelihood of getting approved:

• Check Your Credit Report: Look for mistakes and dispute any inaccuracies.

• Pay Bills On Time: Even a few months of timely payments can help.

• Reduce Existing Debt: Lower your credit card balances and avoid new loans.

• Save for a Larger Deposit: A bigger deposit reduces the lender’s risk and can lower your monthly payments.

• Consider a Guarantor: Having someone with good credit co-sign your application can make approval easier.

• Shop Around: Compare offers from multiple lenders, especially those specialising in bad credit car finance.

• Avoid Multiple Applications: Too many applications in a short time can hurt your credit score. Use eligibility checkers where possible.

Checklist: Steps to Take Before Applying

1. Get your latest credit report (Experian, Equifax, or TransUnion).

2. Fix any errors you find on your report.

3. Calculate your budget and determine what you can afford monthly.

4. Gather proof of income (recent payslips, bank statements).

5. Save for a deposit-the bigger, the better.

6. Research specialist lenders who work with bad credit.

7. Use soft search tools to check your eligibility without affecting your score.

Why Choose Compass Vehicle Services Ltd?

At Compass Vehicle Services Ltd, we believe everyone deserves a chance to drive the car they need-regardless of their credit history. Here’s what makes us different:

• Manual Application Review: We don’t rely on automated credit scoring. Our in-house experts review every application personally.

• Individual Assessment: We look at your overall circumstances, not just your credit score.

• Affordability Focus: If you can show you can afford the payments and provide traceability, we’ll do our best to help-even if you’ve been turned down elsewhere.

• Specialist in Bad Credit: We have years of experience helping people with poor or no credit history get behind the wheel.

Get in touch today to see how we can help you!

Frequently Asked Questions

Will applying for car finance hurt my credit score?

Using eligibility checkers or soft searches won’t affect your score. Only full applications leave a mark.

Can I lease a car instead of buying with bad credit?

Yes! Leasing can be a flexible option. Read our guide: Bad Credit Car Finance vs Bad Credit Car Leasing.

How long does it take to get approved?

With all your documents ready, approval can be as quick as 48 hours.

What documents will I need?

Typically, you’ll need proof of ID, proof of address, recent payslips, and bank statements.

Final Thoughts

Getting car finance with bad credit isn’t always easy, but it is possible with the right approach and preparation. Take the time to improve your credit, research your options, and work with lenders who understand your situation. With patience and the right support, you’ll be on the road in no time.