Bad Credit Car Finance | Apply for Poor Credit Car Loans - Carplus (2023)

How does bad credit car finance work?

Bad credit car finance is designed for people with poor credit scores to buy a car. As car finance brokers, we understand that everyone has a different credit history. That's why we can offer car finance with bad credit – even if other lenders have refused you in the past.

Our financing is still applicable if you have an Individual Voluntary Agreement (IVA), a County Court Judgement (CCJ), a previously- declared bankruptcy, or if you are self-employed.

We believe everyone deserves fair and unbiased judgment - so no matter your credit history, we'll assess every case on its own merits and your circumstances. Additionally, we have a car finance calculator that will help you get a picture of how much time it’ll take you to pay out the loan.

Can I get car finance with bad credit?

Yet, it is entirely possible to get car finance with a bad credit score. The Carplus team looks at situations on a case-by-case basis to find the perfect deal.

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Brokers need to make sure you are the right financial fit to get bad credit car finance; thus, they must carry out credit checks. However, if you have a bad credit score or no credit score at all, it may not be easy to find a lender who will approve your bad credit history for car finance.

Also, there is no minimum score required to get approved for a bad credit car loan. There are many lenders that will approve you for a car loan, even with a low credit score. However, the rates available for applications with poor credit may be higher.

Can I finance a used car with bad credit?

It is a well-known fact that brokers are hesitant to offer car finance if you have a low credit score. Initially, the circumstances may seem challenging. However, there is a solution. At Carplus, we will help you secure a deal for a used car with a poor credit score, even if other lenders have turned you down after seeing your credit history. It is advised not to make a financial decision until you've thoroughly investigated all of your possibilities based on your credit history.

What causes you to have bad credit?

The following factors can cause you to have a bad credit rating:

  1. Inability to follow a credit agreement.
  2. Bankruptcy.
  3. Opting for a credit card that does not match your lifestyle and expenses.
  4. County Court Judgements (CCJ).
  5. Identification duplication or theft.
  6. Minimum monthly payments on the credit card.
  7. Having zero credit history.

Can I get car finance with no credit score?

At Carplus, it is possible to get car finance with no credit history. Having zero credit history can prove to be an obstacle to getting cars financed. One main reason is that car finance lenders are unsure if they can trust the borrower or not.

Since they have no insight about how effectively they manage their finances, lenders consider persons with no credit history to have bad credit. If that's the case, your car loan offer may be the same as someone looking to get bad credit car finance. There's no way of knowing how likely car finance lenders are to get their money back.

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Types of car finance for people with bad credit score

Regardless of your situation, we think you should be able to get car finance at a competitive rate. If you have a bad credit score, you can opt for the following types of car finance:

  1. No credit car finance: This type of car finance is for people who have no credit history. Our lenders who specialize in dealing with bad credit scores will evaluate various criteria to establish your financial capacity and creditworthiness if you are under 18 or have no credit history whatsoever.
  2. No deposit car finance: A car finance agreement without a down payment is not available from any provider. Our panel of lenders can provide you with the best interest rates if you have no savings. You will be at a disadvantage if you do not have a deposit. It's usually a good idea to retain your car finance application and put down a deposit first.
  3. No guarantor car finance: This type of car finance is intended for those who do not have dependable friends or family to help them get car finance. For poor credit applications, many lenders need guarantors, but our team specialises in identifying finance alternatives for people with such credit history.
  4. County Court Judgment (CCJ) car finance: CCJ car finance is obtainable. However, it is tough to come by. If you were issued a CCJ last year, we recommend waiting until the 12-month term has passed before applying. There are still choices if you can't wait, but expect longer terms and higher interest rates.
  5. Hire purchase (HP) – regular monthly payments. You will get the car at the end of the contract.
  6. Personal contract purchase (PCP) – regular monthly payments. Secured against the vehicle. At the end of the car finance agreement, you have three options. You can return the car, keep it, or exchange it for another.
  7. Car finance if you are unemployed but have the budget or have been refused previously, can be challenging because car finance lenders require trust and a guarantee that their money will be paid back. At Carplus, we can also help people secure financing for cars in these situations.

Could my credit score be too low to get approved for car finance with a bad credit history?

Poor credit history can consequently lower the credit score. Your credit score is used for more than deciding whether or not to provide you with a loan. Conventional car finance lenders (such as banks) may immediately reject someone based on their credit score. Car finance lenders employ their criteria and procedures, which are generally considerably more liberal than traditional lenders (such as banks). Suppose you are currently behind on existing credit agreements. In that case, it is in your best interest to update repayment as soon as possible so that you can get approved for a deal.

How do I apply for bad credit car finance in the UK?

Applying for bad credit car finance with our brokers couldn't be easier:

  • Complete and submit our online car finance application form.
  • We'll perform a soft credit check, which will not affect your credit score and will not be marked on your credit report. This will determine if our panel of financial providers can offer you a finance deal for people with a bad credit score.
  • If provisionally accepted, we can discuss your finance options in more detail. Should you wish to proceed, we will tell you what you need to do next.

We'll take care of everything else and get you the money as soon as possible, no matter what your credit history is.

What documents do I need to apply for bad credit car finance?

If you are interested in obtaining bad credit car finance, you must submit relevant documents. Our panel of car finance lenders will need to review these documents to ensure that this is the right option for you. Requirements will vary depending on the lender, but in general, they will usually ask people to provide:

  • Proof of ID
  • Proof of address
  • Proof of income

Depending on the car finance lender you want to apply to, they will let you know the documents necessary and what format they need to be provided in.

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What can affect the final approval of car finance for people with a poor credit score?

At Carplus, we understand that various circumstances could cause bad credit scores, which is why we examine each case on its merits. However, there are still ways to improve your chances of getting approved for bad credit car finance in the UK.

  1. If you have fallen behind on your credit repayments, do your best to catch up.
  2. If you have an ongoing IVA, try to obtain written confirmation from the insolvency practitioner that they approve of you getting car finance loans. This would not be necessary if you had a prior IVA that has already been settled.
  3. If you are in bankruptcy, we cannot help you. However, we would be happy to give you insight into managing your debt and improving your bad credit score. If a bankruptcy has been discharged, we can certainly help with an application for financing for cars.
  4. Lastly, even if you have an outstanding CCJ in the UK with bad credit, we will still review your applications and help however we can with your car loan.

How to get car finance if you have bad credit?

Getting poor credit car finance can be tricky, but these tips are great ways for people to improve their chances of getting car finance with bad credit history.

  1. Place a larger deposit. You'll be able to reduce your monthly payments plan by placing one when applying for car finance with a bad credit score.
  2. Follow responsible lending practices. You will only get car finance that you can safely repay each month throughout the general term. Our car finance calculator will calculate car finance by comparing your current monthly expenses to your monthly income. Before using it, make sure credit reference and credit profile are up-to-date.
  3. Set realistic expectations. Before applying with us, you can use our car finance calculator; enter your income and expenditures and get an idea of what you can afford to borrow based on your credit score.

How to finance a used car with bad credit?

Complete our brief application form, then we'll work diligently on your behalf to find the best deal for you and negotiate the best terms for your credit situation.

A financial management expert will be assigned to you and will call you to discuss the financial benefits. If you discover a good car finance deal, we'll handle the paperwork so you can start looking for a new vehicle.

Will applying for bad credit car finance affect my credit history?

Absolutely not. We perform a soft search rather than hard searches initially, which doesn’t affect your credit score or report in any way. Not all companies do soft searches initially, opting to perform hard searches instead, but we know that these searches can have an impact that can be avoided. Too many hard searches can reduce your ability to access credit in the future – which is especially bad when seeking a car loan for people with bad credit already. Applying with Carplus won't affect your credit rating unless we do a full credit search on your car finance application. We aim to provide a second chance for our customers, which allows them to build their credit score through monthly repayments.

How can I improve my chances of securing car finance with a poor credit score?

Customers with low credit history have two common methods to improve their chances of securing a car loan. These involve either offering a higher deposit or using a guarantor.

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When applying for a car loan, most customers will be required to put down a deposit to purchase a car. The better your credit score, the lower the deposit required will be. However, the opposite is true if you have a bad credit rating. Suppose you have bad credit and are in a position to offer a higher deposit without affecting your finances. In this case, you may convince the car finance lender you can afford the repayments without defaulting.

Alternatively, you could apply using a guarantor. This involves asking someone financially reliable to provide full economic support if you cannot keep up payments.

They will take over the full debt and will be required to meet the monthly payments on your behalf. From the lender's point of view, this lowers the risk as they have assurances that the money will be repaid in full. The guarantor needs to be financially secure and must also be required to undergo a credit and affordability check before being approved as your guarantor to help you get car finance with bad credit.

Where can I get car finance with a bad credit score? Carplus!

We understand that life is complicated, and not everything goes to plan. That also applies to people's finances, which means they sometimes need a helping hand obtaining bad credit car finance.

Cars play a vital role in the daily lives of tens of millions of people, and limited access to a vehicle can affect them in all sorts of ways.

That's why we are committed to connecting people with bad credit with our established panel of brokers to see if we can find the right deal that matches their situation. It's a bespoke service tailored to each person's lifestyle, giving them the best possible chance of finding an affordable package that won't break the bank.

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Can I get a car loan with 500 credit score? ›

And, yes, if you are in that 500–600 credit score range, obtaining the financing to buy a car is doable. Even a small percentage of individuals with deep subprime credit scores – 500 or below – obtained auto financing in 2021.

Can I get a car loan with very poor credit? ›

In most cases, having bad credit won't prevent you from finding a car loan. But you'll likely pay more — through higher interest rates and fees — than a borrower with good credit.

Can you get a car loan with bad credit and no cosigner? ›

Car shoppers with a credit score under 640 will have a hard time getting a loan without a cosigner, but some bad credit car loans are available.

What car companies help with bad credit? ›

NerdWallet's Bad Credit Auto Loans of 2023
  • Consumers Credit Union - New car purchase loan: Best for applying directly with a lender.
  • MyAutoloan - New car purchase loan: Best for comparing offers from multiple lenders.
  • Carvana - Used car purchase loan: Best for online purchase and financing.
Feb 1, 2023

What is the lowest credit score for car loan? ›

In general, you'll need a credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required to finance a car loan varies by lender. If your credit score falls into the subprime category, you may need to look for a bad credit car loan.

What is a second chance loan? ›

What is a Second Chance Loan? A second chance loan is a type of loan intended for borrowers with a poor credit history, who would most likely be unable to qualify for traditional financing. As such, it is considered a form of subprime lending.

Can I get a car loan with a credit score of 450? ›

Getting an auto loan with a credit score of between 400 and 450 is more possible than you may think. These are installment loans, and since the vehicle is used as collateral to secure the loan if you default on the payments, the lender has a good chance of getting your car or your money.

Can I get a car loan with a 300 credit score? ›

Generally speaking, banks require a minimum credit score of 600 to give an auto loan without any down payment. However, you CAN buy a car with a score of 400 or a score of 850.

Can I get a car with 500 credit score with no money down? ›

Yes, a 500 credit score will still qualify you for a car loan. However, credit scores affect the types of loans you are eligible for, as well as interest rates, loan amounts, and more. If you have a credit score that needs improving, it won't stop you from getting a car loan, only the terms.

What credit score is needed to not have a cosigner for a car? ›

What credit score does my cosigner need for a car? There's no set credit score that you need to get a car loan. Some lenders may not have a requirement for your cosigner's credit score, while others may want a minimum of 670. As a general rule, the higher the score, the better your chances for approval.

How can I get a car loan with no credit score? ›

How to Get a Car Loan With No Credit
  1. Get a Cosigner. If you have a family member or friend with a great credit history who is willing to cosign your loan application, that can help you get approved with a lower rate. ...
  2. Make a Large Down Payment. ...
  3. Apply for a No-Credit Auto Loan.
Sep 6, 2022

What credit score is needed to not have a cosigner? ›

Generally, a cosigner is only needed when your credit score or income may not be strong enough to meet a financial institution's underwriting guidelines. If you have a stronger credit score, typically 650 and above, along with sufficient income to cover the loan payment, it's likely you will not need a co-signer.

Where is the easiest place to get a car with bad credit? ›

More Bad Credit Auto Loans to Consider
  • Capital One Auto Finance. ...
  • Carvana. ...
  • DriveTime. ...
  • LightStream. ...
  • CarMax. ...
  • Vroom. ...
  • CarZing. ...
  • offers bad credit auto financing packages for consumers with any type of credit issue, including a prior bankruptcy.

Who is the easiest car company to get financing? ›

The Easiest Auto Loans to Get Online
  1. Auto Credit Express. 4.9 /5.0 Stars. ...
  2. Auto Loan. 4.5 /5.0 Stars. ...
  3. 3.9 /5.0 Stars. ...
  4. Carvana. ...
  5. Capital One Auto Finance. ...
  6. Credit Acceptance. ...
  7. DriveTime. ...
  8. LightStream.

How can I get a car loan with a 550 credit score? ›

Two common ways to do this include:
  1. Adding a cosigner – Not all subprime lenders require a cosigner, but having one on hand doesn't hurt. ...
  2. Making a larger down payment – We recommend that you make the largest down payment you can comfortably afford if you have bad credit.
Nov 25, 2019

Can you get a car loan with a 480 credit score? ›

Car Loans with a 480 Credit Score

Less than 7% of auto loans go to people with a credit score in the 300-539 range, and the share of loans given to applicants with a 480 credit score in particular is likely just a small fraction of that. As a result, your odds of getting approved for a decent auto loan are slim.

Can I get a car with 200 credit score? ›

Your credit score is always important when applying for new loans, but when it comes to buying a car, there is no minimum score needed to be approved.

Can I get a car with a 530 credit score? ›

While it may seem daunting to qualify for a car loan with a bad credit score (below 580), there is a large network of lenders and car dealers who are more willing to work with low- and bad-credit score borrowers. If all goes well and payments are made on time, it can help boost your credit profile.

What is the easiest loan to get approved for? ›

The easiest loans to get approved for are payday loans, car title loans, pawnshop loans and personal loans with no credit check. These types of loans offer quick funding and have minimal requirements, so they're available to people with bad credit.

Which loan company is easiest to get? ›

The easiest banks to get a personal loan from are USAA and Wells Fargo. USAA does not disclose a minimum credit score requirement, but their website indicates that they consider people with scores below the fair credit range (below 640). So even people with bad credit may be able to qualify.

What can I do if no one will give me a loan? ›

Using a credit card, getting a payday alternative loan from a credit union, or borrowing from family or friends are all options if you're not able to get cash through a personal loan. These options aren't perfect: Credit cards can have high interest rates, and getting loans from family can be risky.

What loans do not do a credit check? ›

There are a few different types of loans that do not require a credit check, such as payday loans, no credit check installment loans, personal loans with no credit check, most federal student loans, and some credit-builder loans.

What is proof of income for Carvana? ›

You can upload your 2 most recent, consecutive pay stubs for your proof of income or address verification. We may also look at pay stubs as part of your employment verification. Some customers may be required to upload additional income documents when placing an order.

Can I finance a car with 520 credit score? ›

Car Loans with a 520 Credit Score

As a result, your odds of getting approved for a decent car loan are slim. You will need to compare your options carefully and consider either placing a bigger down payment or purchasing a vehicle that's less expensive.

Can I get finance with poor credit? ›

Yes you can get car finance with bad credit. Having bad credit doesn't mean you can't borrow money to buy the vehicle you need for finance, but it may mean some lenders won't approve you.

What raises credit score? ›

Factors that contribute to a higher credit score include a history of on-time payments, low balances on your credit cards, a mix of different credit card and loan accounts, older credit accounts, and minimal inquiries for new credit.

How can I clean my credit report fast? ›

You can work to clean your credit reports by checking your reports for inaccuracies and disputing any errors.
  1. Request your credit reports.
  2. Review your credit reports.
  3. Dispute all errors.
  4. Lower your credit utilization.
  5. Try to remove late payments.
  6. Tackle outstanding bills.
Mar 3, 2022

How much should I put down on a car with a 500 credit score? ›

Bad Credit Car Loan Down Payments

If you have bad credit, poor credit, or even no credit, you should expect to have a minimum down payment of 10% or $1,000 for your car, whichever is the lower amount. If you're trying to get a high-risk auto loan, you may even have to have a higher down payment.

What is the minimum down payment for a car? ›

As a general rule, you will have to pay a minimum of 10% of the car value as a down payment. Some lenders/banks offer car loans up to 90% of the on-road price.

How much car will I be approved for? ›

Follow the 35% rule. Whether you're paying cash, leasing, or financing a car, your upper spending limit really shouldn't be a penny more than 35% of your gross annual income. That means if you make $36,000 a year, the car price shouldn't exceed $12,600. Make $60,000, and the car price should fall below $21,000.

How much of a loan can you get with 500 credit score? ›

How much of a loan can you get with a 500 credit score? If you are looking for a personal loan, some lenders provide them for borrowers with a 500 credit score. You can borrow up to $10,000 through some of these companies. Three of these companies that you can try are MoneyMutual, CashUSA, and CreditLoan.

What loan can you get with 500 credit score? ›

FHA loans usually have a lower interest rate and less stringent credit requirements than conventional mortgages. You may qualify with a poor credit score as low as 500, but you must also satisfy several other requirements to get an FHA loan guarantee.

What can a 500 credit score get you? ›

A score of 500 is considered below average for VantageScore and FICO. It can be difficult to be approved for certain types of credit if your credit scores are below average. And if you are approved, you might pay extra fees, face higher interest rates for loans or have to put down a security deposit.

Can I get a loan with a 524 credit score? ›

Credit Rating: 524 is considered a bad credit score. Borrowing Options: Most borrowing options are available, but the terms are unlikely to be attractive. For example, you could borrow a small amount with certain unsecured credit cards or a personal loan with no credit check, but the interest rate is likely to be high.

Can I get a loan with a 400 credit score? ›

Consumers with very poor credit scores between 400 and 450 often have their credit applications rejected, according to FICO, a credit scoring agency. But it doesn't have to be that way. Loans and credit cards for 400 to 450 credit scores are still available.

Can I get a loan with 451 credit score? ›

Your score falls within the range of scores, from 300 to 579, considered Very Poor. A 451 FICO® Score is significantly below the average credit score. Many lenders view consumers with scores in the Very Poor range as having unfavorable credit, and may reject their credit applications.

Can you get a personal loan with a credit score of 480? ›

As a result, a 480 credit score will make it difficult to qualify for a loan or unsecured credit card, and you will need to focus on rebuilding your credit before trying to get a mortgage, car loan, etc.

What is the easiest place to get an auto loan? ›

The Easiest Auto Loans to Get Online
  1. Auto Credit Express. 4.9 /5.0 Stars. ...
  2. Auto Loan. 4.5 /5.0 Stars. ...
  3. 3.9 /5.0 Stars. ...
  4. Carvana. ...
  5. Capital One Auto Finance. ...
  6. Credit Acceptance. ...
  7. DriveTime. ...
  8. LightStream.

Can I get a car with a 520 credit score? ›

Car Loans with a 520 Credit Score

As a result, your odds of getting approved for a decent car loan are slim. You will need to compare your options carefully and consider either placing a bigger down payment or purchasing a vehicle that's less expensive.

What hurts credit score the most? ›

Payment history — whether you pay on time or late — is the most important factor of your credit score making up a whopping 35% of your score. That's more than any one of the other four main factors, which range from 10% to 30%.

How to reset credit score? ›

Taking Steps to Rebuild Your Credit
  1. Pay Bills on Time. Pay all your bills on time, every month. ...
  2. Think About Your Credit Utilization Ratio. ...
  3. Consider a Secured Account. ...
  4. Ask for Help from Family and Friends. ...
  5. Be Careful with New Credit. ...
  6. Get Help with Debt.

What is the easiest unsecured card to get? ›

The Credit One Visa Card is the easiest unsecured credit card to get. It is available to people with bad credit or no credit. Cardholders also earn 1% cash back on eligible purchases.


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