Obviously, it is easier to secure an agreement for finance if your credit rating is good, but it’s by no means impossible for you to get car finance with a history of poor credit.
A select group of lenders
Car.co.uk can offer car buyers access to lenders who are prepared to offer finance to those with a history of poor credit. Whether you have filed for bankruptcy, have incurred county court judgements, or missed payments, we can assist you in getting finance to suit your individual circumstances.
Saving a deposit
If your credit score could be better or you’ve had problems obtaining credit before, there are some measures you can consider to improve your chances of securing a finance deal.
Prior to applying for lending from a finance company, try if at all possible to put money aside for a deposit. A sum as small as £500 could make a notable difference in your application for finance being rejected or accepted. By offering a deposit, you can increase your affordability by reducing the size of the installments you pay back monthly. Increasing your affordability from the lender’s point of view makes you a less risky investment and one they’re more likely to offer a deal to. A deposit can also aid you in securing a better rate of interest.
Poor credit rating due to bankruptcy
Buyers who have managed to satisfy an order of bankruptcy inside of six months can still get car finance access. It’s our recommendation that prior to application, you work on rebuilding your credit profile.
This can be achieved in many ways. Setting up direct debits for your utility bills is an ideal way to ensure you don’t miss any of your ongoing monthly payments. Prepaid credit cards can also bolster your profile when you preload funds onto the credit card before paying for goods and services with it.
Poor credit rating due to County Court Judgements (CCJs)
A CCJ, when registered, remains for a total of six years on the Register of Judgements, Orders and Fines, but it doesn’t have to stop you from getting a finance agreement.
A CCJ paid in full inside of a month can be removed entirely from the register of Judgements Orders and Fines. If you pay the CCJ in this time, it is still possible to get the record stamped as “satisfied” within the register. To do this, the court must be contacted in order to provide proof the CCJ has been paid. A fee charged for administration will be applicable – this is normally £15.
Poor credit ratings due to defaulting on payments and missed or late payments
It’s understandable that occasionally a payment might slip by your attention and that cash flow problems can lead to payments being missed. If you’ve struggled with such issues as missed payments, car finance is still a possibility open to you.
To enhance your chances of being accepted for finance, you can create a “notice of correction” and add it your personal credit file. In your own words you can provide a 200-word statement explaining why you missed your payment. In offering an explanation you give lenders the possibility to read your file and understand the circumstances of your late repayment, increasing the chance that they will accept your application for finance.
To find out more about this topic, don’t hesitate to get in touch with our team.