An imperfect credit report has the potential to complicate life in a variety of ways. On the plus side, specialist lenders across the UK are beginning to acknowledge how difficult it can be to maintain a flawless credit history. As a result, bad credit car finance is now more widely available than ever before.
But how easy (or otherwise) is it to get car finance with bad credit? Assuming your credit report has taken a fair few hits, can you still get a decent deal on the car you need?
The short answer is yes, but it’s nonetheless important to understand how your credit score may impact your eligibility.
Will Bad Credit Affect My Eligibility for Car Finance?
With most conventional lenders, bad credit applicants are counted out of the running. Unless you have a good credit history, they won’t process your application beyond the first stage. However, there is a growing network of specialist bad credit car finance companies, which welcome applicants with poor credit histories.
Can I Definitely Get Car Finance with Poor Credit?
With a poor credit car finance company, other criteria are used to assess eligibility. Examples of which include employment status, current financial position and so on. As with all types of finance, there are no guarantees that you will definitely qualify. However, if you are in a good financial position and can comfortably afford the loan, there’s no reason why you shouldn’t qualify for car finance.
Will I Still Get a Good Deal with Poor Credit?
Generally speaking, poor credit applicants are considered ‘higher risk’ than applicants with a good financial track record. As a result, poor credit car finance is usually offered at a slightly higher rate of interest, in order to augment this additional risk. Nevertheless, this doesn’t mean the UK’s specialist poor credit car finance companies aren’t offering outstanding deals for subprime applicants. It’s simply a case of ensuring you direct your application at the appropriate lender.
How Can I Ensure I Get a Good Deal?
The easiest way to ensure you get a good deal is to apply through an experienced independent broker. Instead of applying with a lender directly, it’s better to have a good broker compare the entire market on your behalf. There are dozens of specialist lenders offering hundreds of deals for poor credit customers – a quality broker can help you find your perfect deal in minutes.
Will Applying for Car Finance Affect My Credit Report?
This varies from one lender to the next, so it’s again a good idea to work with an independent lender. If you are concerned as to your eligibility, they can consider your case and ensure your application is submitted only to the most appropriate lenders.
What Kind of Documentation Will I Need?
Last but not least, information and documentation needed for car finance follow the usual standards. In order to qualify for bad credit car finance, you will need to provide proof of your identity, proof of address and in some instances proof of income. If you encounter any difficulties obtaining or providing such documentation, speak to your broker for advice.