Yes, You Can Finance A Car With Bad Credit: Here’s How

Check your credit report

The first step to improving your credit score is checking your credit score. It can be helpful to know where you are currently at and how much room for improvement there is. Many online credit score checkers can help you identify the cause of the issue. Some will even give you tips and guidance on how to improve it.

Continue paying your existing bills on time

One of the best ways you can improve your credit score for car finance is by continuing the pay for any existing bills on time and in full where possible. Paying existing bills on time proves to lenders that you are capable of keeping on top of payments. This makes you more likely to be accepted for credit in the future.

We know that this is easier said than done, however, it will have the biggest and fastest impact on your credit score. Finding a way to suitably manage your debt will always be the best approach.

Limit applying for new loans or credit cards

Applying for loans and other types of finance will require a hard credit check. This will affect your credit score and remain on your report for a couple of years.

If you have lots of hard credit checks in a short space of time and have been declined for a loan, the lender will see this and they may be less inclined to offer you credit.

If you must have a credit check, try to keep these ‘soft’ and avoid any hard credit checks until you have built your credit score back up.

Get a credit card if you need to build a credit history

If you need to build a credit history, applying for a credit card is a great way to do this, provided that it is used wisely. Credit-builder cards typically come with low credit limits and a high APR (Annual Percentage Rate). However, these can be used to build your credit score in a manageable way.

Much like a standard credit card, you should try to pay off your credit card in full every month. Avoid any late payments which could harm your credit score further.

Check to see if someone you are financially linked to has bad credit

If you have a mortgage or a joint bank account with someone else who has a bad credit history, this can affect you. Even if you’re applying for credit separately from them. If you no longer have a relationship with this person, you can apply for a ‘notice of disassociation’. This is a formal request to remove the individual from your credit file.

Register to vote

When you register to vote, these details are recorded on your report. This helps finance lenders confirm information such as your name and address. This helps to improve the security and confidence that lenders have in you, leading them to be more inclined to offer you finance.