Can I get Car Finance if I have bad Credit?

Credit RatingThe simple answer is yes, you can get credit even if you have bad credit history. Any credit agreements that you struggled to pay in the past will lower your credit rating and leave you in a position where you may describe yourself as having bad credit. This is also known as poor credit or adverse credit, but they all mean the same thing.A person missing payments on a mortgage or a loan is a common reason why a person may get a negative credit rating. Sometimes though, it maybe something as minor as a person missing a credit card payment.

Sometimes people with no credit history will encounter problems when trying to gain finance. This is because they are seen as too much of a risk for lenders with no track record of reliability. When it comes to car finance though, those with a poor credit rating or no credit rating can still get access to finance.
Personal loans may be difficult to find for those with a poor credit rating or the APR may be so high that the deal becomes unworkable. People with a bad credit score are deemed too much of a risk when it comes to personal loans.

Hire Purchase (HP) deals are often offered to those with a poor credit history. HP can be described as a type of loan where the debt is secured for the lender against the asset. With car finance the asset is the vehicle. These types of deals are much less risky for the lender so they are often easier to obtain for someone who has a bad credit score.

The deals offered to those with a poor credit rating will not be as favourable as those offered to people with a better credit rating. Some lenders will specialise in offering car finance packages for those people with a bad credit ratings. So it’s important to make sure you check what sort of rate you should be receiving. Remember though if you apply to many different finance companies your credit rating may be affected due to you looking credit hungry.

To make sure that you do not fall into the category of bad credit ratings it is vital that you adhere to the conditions of the finance arrangement and make the payments on time. You can use this resource to pre-estimate your credit score.


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