Media post: How to get approved for bad credit car finance – find out what you can do to get yourself approved for car finance with bad credit
Bad credit is anything that has a negative impact on your credit score and can happen when you miss one or more payments on any of your active credit.
This will present itself in one of the following ways on your credit file:
- Arrears
As soon as you start to miss payments, any finance company you apply to will be able to see how many payments behind you are with any of your active pieces of credit. If you are over your arranged overdraft limit on your bank account, or over your credit limit on a credit card or catalogue finance agreement, then this will be looked at similarly to arrears.
- Default
When you have missed several payments, the finance company may decide to default the credit agreement. This usually depends on their ability to contact you and put an arrangement in place for the future.
- County Court Judgement
If you have defaulted on something, and you have not been able to come to an arrangement with the creditor about paying them back, they may seek a CCJ so that they can recover their money through your employer or the sale of your property.
Every item of bad credit has a negative impact on your credit score and reduces your chances of being approved for future credit.
The more recently that you had any bad credit issues, the more impact this will have on your ability to obtain finance.
For example, if you defaulted on a credit card last month, this will have a worse impact than a credit card you defaulted on 5-years ago.
All credit, whether active, settled, or defaulted, remains on your credit file for 6 years from the date of account settlement or the default date.
Can I still get approved for car finance with bad credit?
Yes you can. In fact, there are more than 10 fair and bad credit car finance providers that actively lend money to people with fair or bad credit ratings. Most of the determination they make is based on your affordability, and the finance companies are mostly looking for:
– Does your income minus your expenditure leave enough to be able to comfortably afford a car finance agreement?
– Does your credit file demonstrate the affordability to pay your current credit commitments?
– Has your credit history demonstrated the ability to pay any similar credit agreements to the one you’re applying for now?
All the fair and bad credit car finance providers use their own credit scoring systems to determine which applicants pass their credit check, so regardless of your credit score on Experian, Clearscore or Credit Karma, the only way to know if you can be approved for bad credit car finance is through making an application.
If I’ve been declined for car finance, should I keep trying?
Most fair and bad credit car finance providers will automatically reject applications they’ve seen and rejected in the past 30 days, so it’s best to wait at least 30 days since your last application, before you try again.
There are some things you can do to improve your chances of getting approved for car finance:
- Wait 30 days since your last application
- Register for the Electoral Register
- Catch up any current arrears you have
- Make sure you aren’t over any credit limits or arranged overdrafts
It is also worth getting hold of a copy of your credit report by signing up to https://creditkarma.co.uk so that you can see when your credit file updates after you have made any changes.
Are there specialist bad credit car finance dealers?
Yes, there are several across the UK, here is an article about some of the top rated bad credit car dealers: https://www.getabettercar.co.uk/bad-credit-car-finance-near-me/
This article was written by Duncan Twigg, Director of Get A Better Car Nottingham – Fair and Bad Credit Car Finance Specialists
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