Can I Get Car Finance With Bad Credit?

If you’ve got a poor credit score and you’re wondering whether car finance is even an option, the honest answer is yes; in many cases, it is. But the outcome depends a lot on the lender, not just the number on your credit file.

Here’s what you actually need to know.

What Does 'Bad Credit' Mean to a Lender?

Bad credit isn’t a single thing; it’s a category that can include a range of different situations:

Missed or late payments on existing credit
Defaults on loans or credit cards
County Court Judgements (CCJs)
Individual Voluntary Arrangements (IVAs) or Bankruptcy
A very limited or thin credit file (little borrowing history)
Multiple recent credit applications in a short space of time

Different lenders treat these differently. A mainstream high-street lender might decline all of the above. A specialist lender might consider most of them, depending on the broader picture.

What do lenders actually look at?

Your credit score is one data point, not the whole picture. When a lender assesses your application, they’re looking at several things alongside your score:

Your income and regular outgoings (affordability)
How long ago any credit issues occurred
Whether the issues are resolved or ongoing
Whether you have a deposit
The value and age of the vehicle you want to finance

A CCJ from five years ago that’s been satisfied is very different from a default last month that’s still active. Lenders factor in context, not just the headline score.

Types of Bad Credit and How They Affect Your Application

Missed or Late Payments

One of the most common credit issues. Even one or two missed payments can lower your score, but many lenders, particularly specialist ones, will still consider applications if the rest of your finances look stable.

Defaults

A default is recorded when a lender closes your account due to non-payment. It stays on your credit file for six years. Applications are harder but not impossible; specialist lenders often assess defaults on a case-by-case basis.

CCJs

A County Court Judgment is a court order requiring you to repay a debt. Satisfied CCJs (fully paid) are viewed more favourably than unsatisfied ones. Some lenders on specialist panels will consider CCJS depending on when they were issued and whether they’ve been settled.

No Credit History

Ironically, having no credit history can be just as challenging as having poor credit. Lenders have no track record to assess. This often affects younger applicants or those who’ve never borrowed before.

Can You Still Get Approved?

Yes, but the terms may differ for someone with an excellent credit score. With poor credit, you might find:

Higher interest rates than advertised
A request for a deposit to reduce the lender’s risk
A lower loan amount than someone with clean credit
Fewer lender options (though specialist lenders exist for exactly this)

The key is reaching lenders who specialise in non-standard credit, not applying to mainstream lenders who are unlikely to approve you, which risks damaging your score further.

How to Improve Your Changes Before Applying

Even small improvements to your credit position can make a difference:

Register on the electoral roll at your current address – gov.uk
Check your credit file for errors and correct them
Avoid making multiple applications in a short period (each hard search leaves a mark)
If possible, save a deposit; it reduces the lender’s risk
Make sure any outstanding missed payments or defaults are being addressed

You don’t need perfect credit to apply, but the more stable your finances look overall, the better.

Frequently Asked Questions

Will applying for car finance hurt my credit score?

Applying with a soft search, as Motor Loans R Us uses initially, won't affect your credit score. A hard search only happens once a lender reviews a full application.

Do I need a deposit if I have bad credit?

Not always, but a deposit can significantly improve your chances of approval and may result in a lower interest rate. Even a small amount helps.

Can I get car finance after bankruptcy?

It depends on how long ago the bankruptcy occurred and whether it has been discharged. Some specialist lenders will consider applications from discharged bankrupts, particularly if your finances have stabilised since.

How long do CCJs affect my finance applications?

CCJs stay on your credit file for six years from the date of issue. However, a satisfied (paid) CCJ is viewed much more favourably than an outstanding one, and some lenders will consider them before the six years is up.