There’s no getting around it. Securing car finance with a low credit score can be frustrating. Almost as frustrating as tracking down a reasonably priced coffee in London or riding the Central Line at rush hour.

Our best advice? Pare back your expectations and consider buying a used car. Not only are second-hand vehicles easier on the wallet but they potentially come with lower credit score requirements due to costing less than a brand-new version of the same vehicle…

Struggling with poor credit? Plenty of Brits are in the same boat. In fact, around 20% of British adults have a poor credit score. The secret to getting around it is to understand how credit scores work and why yours is lacking.
We’ve got your back with this easy-to-read guide.

How is poor credit affecting your car finance?

Credit scores are a bit like school reports. They tell lenders how reliable you are with money. How bad does your score have to be to fall into the “poor” category?
What’s considered “poor” can vary between credit agencies:

  • Experian: Anything below 720 out of 999 is seen as poor.
  • Equifax: A score under 380 out of 700 lands you in the poor category.
  • TransUnion: Scores below 565 out of 710 are considered poor.

Having a score in these ranges can make lenders cautious. What does this mean for borrowers? Higher interest rates and rejections. It’s more common than you might think. The latest figures from the Money and Pensions Service (MaPS) reveal that one in five UK adults are declined for credit.

It’s a high percentage, but don’t let it discourage you. Whether you’re worried about the outcome of an application or have already been denied, understanding where you stand is the first step to getting around car finance with a low credit score.

Unpacking a poor credit score

There are a few reasons why your score might be in the doldrums. Maybe you missed a few payments, defaulted on a loan, or you’re just carrying a bit too much debt. Whatever the reason, poor credit can make getting car finance a bit trickier.

But don’t give up just yet. With the right preparation, you can still find a way to make your car finance and credit score work. Lenders will want to know you’re capable of making those monthly payments, so having your financial ducks in a row is a great place to start.

Assessing your car finance situation

Before you start shopping for a new-to-you car it’s time for a quick reality check. Ignorance isn’t bliss. Knowing your credit score is essential. You can check it online for free to get an idea of what you’re up against.

Next, take a good look at your finances. Ask yourself:

  • What’s your income like?
  • What are your locked-in monthly expenses?
  • What debts are you juggling?

These questions will help you figure out what you can realistically afford. car finance calculator is a great tool to help you find that sweet spot. Crunch your numbers so you’re not left with more month at the end of your money.

What can you expect from your poor credit car finance?

Higher interest rates, bigger deposits and shorter loan terms are common symptoms of poor credit. The good news? With the right strategy, you can secure the best deals for car finance with a low credit score , just like these customers did:

“Helped me all the way. So easy to do. And I’ve got a bad credit score. So it’s possible to get it through these guys. Really pleased with the help and support.” – Carl

“Very easy and quick to have me in my new car and considering I have bad credit they managed to find me a good deal. Very happy customer.” – Thomas Dudley

Improving your application

Use these tips to give your car finance and credit score application the best possible chance:
Start by saving for a bigger deposit. It shows you’re serious and can reduce the amount you need to borrow.

  • Next, gather proof of a steady income. Payslips, bank statements – whatever it takes to show you’re on solid ground.
  • Don’t go for the flashy sports car if your budget is more sensible saloon. Look for something affordable, reliable and within your means.
  • Got a story behind your poor credit? Maybe you lost your job or had unexpected expenses. Tell the lender. They might be more understanding than you think.

Avoiding predatory lenders

It’s easy to feel like you’ve got a target on your back when you’re looking for car finance with a low credit score. Some lenders out there specifically target individuals with low income and bad credit sare as bent as a nine-bob note, so watch out for red flags. Here are some common ones:

  • A lender promises guaranteed approval without looking at your finances
  • You’re seeing sky-high interest rates
  • They push you to sign paperwork quickly without giving you time to read the terms.
  • There are hidden fees or charges that weren’t clearly explained.
  • They discourage you from asking questions or getting a second opinion.

How to recognise fair vs. exploitative terms

Knowing the difference between fair and exploitative terms is a must. Fair terms are transparent and clearly state interest rates, fees and repayment conditions. There are no sneaky clauses or hidden charges. Lenders will encourage you to ask questions and take your time before signing anything.

Exploitative terms are often cloaked in jargon. Look out for excessive fees or penalties for late payments, along with aggressive sales tactics to pressure you into a quick decision.

Protect yourself and always read the fine print to make sure you understand what you’re signing up for. A reputable lender broker like My Car Credit will be transparent and supportive, not confusing and pushy.

See how our poor credit car finance can support you

At My Car Credit, we get that life doesn’t always go to plan. We’re here to help you match up your car finance and credit score, with no hidden fees or nasty surprises. Just honest advice and a straightforward signup process.

Give us a call on 01246 458 810 to find out more or email us at enquiries@mycarcredit.co.uk to see how we can help you get where you want to be – behind the wheel! You can get the ball rolling, without it impacting your credit score*, by submitting an initial application.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!