Having a bad credit history can impact you on a lot of different purchasing decisions, none more so than buying a new car. As many lenders will rely on the details held in your credit report, if you are someone with a low credit score, your opportunities will be few and far between when it comes to applying for the best lending products. However, having bad credit doesn’t mean you will not receive any help at all, as there are lenders out there willing to help those with less than perfect credit scores. Here, we look at how you can get car finance with bad credit with ease.
Compare the Lenders You Find
According to research by Finder.com, in April last year over 200,000 cars were purchased on finance in the UK, 76,000 of which were new cars. However, many of the people doing so would have had a good credit score to be able to get approval from many of the car finance lenders you will find online. If you have a bad credit history, you’ll want to go through and compare the lenders you find first before applying. If you randomly choose a lender to get car finance through, you run the risk of being declined due to not doing your research.
You should seek out the lenders that can realistically offer you really bad credit car finance options. That way you can avoid applying for the ones that will not be able to approve you. This can be time-consuming, Fso make use of online comparison tools to get an overview first, focusing on the ones that can offer help to bad credit applicants. It is also important to compare bad credit lenders so that you can find the best deal on the terms and amount of interest offered, as many will only be able to help if you accept higher rates of interest.
Check Your Credit Report Before Applying
Ideally, you should also check your credit report before any application. This will help you understand how bad your credit history is and also provide you with an understanding of why. You never know, you may be able to improve your situation by focusing on some of the details in the report, so that you can improve your credit score going forward. Additionally, if you have no idea what your credit score is or have never accessed your credit report, you will be going into an application for car finance completely in the dark.
Make Sure You Have the Affordability
If you had bad credit and are going to apply for car finance, you should have the affordability to pay for it. Take some time to work out your income and outgoings which will show you what your disposable income currently is. The reason this is important is that most bad credit lenders that can help you will need to have proof that you can afford the loan amount you want. Otherwise, if you cannot show affordability, the chances of getting bad credit car finance are slim to none.
If you do all these checks before applying for car finance with bad credit, you will significantly increase your chances of being approved without further harming your credit history.