7 Factors That Can Affect Your Credit Rating

2 women happy knowing what affects their credit scores

Credit ratings can be complex and at times, extremely frustrating. Even the smallest financial hiccups can leave a lasting footprint on your score. This means that a few missed credit card payments over the years or an outstanding mobile phone debt can compromise your application.

This is why it’s so important to develop a good understanding of your credit rating and the various factors that can affect your score. So, what can affect credit rating? Read on for our guide to factors than can influence your rating, as well as tips on how to boost your score.

Understanding credit ratings

Before we dive in let’s take a look at what credit ratings are and why they matter. Basically, credit ratings are used by prospective lenders to evaluate the overall credit risk of a debtor. Historic financial data is used to predict a borrower’s ability to pay back a debt and calculate the risk of defaulting. A particularly bad credit rating could see some applications rejected. In some cases, it could even rule you out of the lowest rate products.

The latest data from multinational consumer credit reporting agency Equifax reveals just how stubborn credit scores can be. Equifax report that the average Brit is issued with a score of 380. This is considered a ‘fair’ score but is just one point away from the 280-379 category which is considered ‘poor’. The perfect score is 700, suggesting everyday borrowers aren’t necessarily as upstanding as you might think. 

Here’s some of the most common factors that can affect your credit rating:

1. Payment history

Keeping up with your credit card payments is one of best ways to build a good credit score. Even making the minimum monthly payment shows lenders you’re a responsible borrower. It also demonstrates that you can commit to a long-term loan. Missed or late credit payments can tarnish your credit score for up to three years. This is why it’s so important to stay on top of your repayments wherever possible.

2. Hard credit inquiries

Carried out by established financial institutions, hard credit checks dig deep into your credit history. They’re used to help creditors make lending decisions. Hard searches are often carried out when applying for larger loans such as mortgages, credit cards and car loans.

While a hard check or two will only lower your credit score by a few points, frequent checks can damage your score and present you as a higher-risk customer. This is because multiple applications suggest you’re chronically short on cash. It could even indicate that you have an irresponsible attitude towards debt. Hard credit checks can leave a mark on your report for around two years. It’s important to consider if you really need one before authorising a full application.

3. Being registered to vote

Lenders will often turn to the electoral roll as a quick and easy way to verify your name and address. Access to government-certified information is also an effective way for lenders to protect themselves against fraud. Failure to register or update your information can affect your credit score by up to 50 points. This can have a significant impact on finance applications.

4. Mobile phone contracts

While mobile phone contracts may seem like a sundry expense, they can have a big impact on your credit score. Like credit card repayments, staying on top of your phone contract is a good way to strengthen your credit score. This is great way of showing lenders that you can commit to a regular payment schedule.

5. Finances of a partner

If you’re married or in a long-term relationship, the finances of your partner will often be factored into your credit score. In some cases, joining forces can strengthen your application. However, if your partner has a ‘thin’ credit history, it may be best to disassociate yourself from them financially.

6. Borrowing percentages

Credit cards can be a good way to build a strong lending history. However, maxing out your cards can have a negative impact on your application. As a general rule of thumb, it’s best to keep your card borrowing below 25%, unless you plan to pay off the full amount every month. This shows lenders you’re responsible and realistic about the money you borrow, and your ability to pay off debt.

7. Utility bills

More than half of major energy providers are now sharing customer data with credit agencies. This makes is essential to maintain good standing with companies such as British Gas and EDF Energy. Utility bills are another good opportunity to establish a good track record with lenders and boost your credit score.

Factors that won’t affect your credit score

We’ve covered some of the biggest factors that will affect your credit score. Now let’s take a look at some of the things that won’t drag you down.

1. Your salary and disposable income

It’s a common misconception that high salaries translate to better credit scores. In fact, lenders are far more interested in how you manage your debts than how much money you earn. For example, an applicant who earns £35,000 a year and pays off their credit card in full every month is far more appealing than an applicant who earns £100,000 a year and has maxed out their credit card and defaulted on several payments. 

2. Soft credit checks

While hard credit checks can leave a lasting footprint, their soft counterparts won’t affect your credit rating. What’s more, they can still give lenders a good overview of your credit history. They’re also known as ‘eligibility checks’ and are great for establishing the likelihood of acceptance before committing to a hard check.

3. Previous mistakes

Losing sleep over a mortgage you deferred on several years ago? Stressing about a credit card that got out of control in your twenties? The good news is mistakes you’ve made in the past don’t always stay around to haunt you.

For example, County Court Judgments (CCJ) issued when a borrower fails to repay money will stay on your record for up to six years. The good news is that they will automatically be removed after that period.

Black marks like Debt Relief Orders or Individual Voluntary Agreements (IVAs) can also have a negative impact on your credit score but won’t necessarily stay on your record forever.

Buying a car with poor credit

Need help securing a car loan? Whether you’re struggling with poor credit car finance or simply need assistance getting the best interest rates, we’re here to help. At My Car Credit we offer tailored car finance to applicants with all types of credit histories. Thankfully, this includes those with less than perfect scores. Get in touch today by emailing enquiries@mycarcredit.co.uk to find out more. We’ll help you secure the keys to your new vehicle as quickly as possible.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Your Credit Profile
Return to search

Related articles

What’s the Difference Between Bad Credit & Poor Credit?

Read More

4 Factors That Impact the Cost of Car Finance

Read More

Do Credit Checks Affect Your Score?

Read More
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.
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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!

Email
or call 01246 458 810

4 Factors That Impact the Cost of Car Finance

New car bought using car finance

Car finance is a great way to spread the cost of a new car. What’s more, it allows you to get a better vehicle and potentially save money on repairs and replacements in the long run. However, the cost of car finance itself can vary quite a bit. This depends on a number of factors, which we’ll discuss in this post.

1.   Cost of the car

The most obvious factor that affects the cost of car finance is the value of the car you’re looking to buy. Car finance is essentially a loan that you take out to pay the dealership or seller. The higher the value of the car, the more money you’ll need to borrow. This will make the monthly repayments higher as well as adding to the interest you’ll need to pay. So, to minimise the cost, more affordable cars are better.

2.   Credit score

Next on the list is your credit score. There are of course plenty of lenders which will provide car loans for poor credit. However, the score itself may affect the rate of interest which lenders will offer you.

Customers with good credit scores are seen as a safe bet, meaning lenders will be able to give them the lower interest rates. On the other hand, those with bad or poor credit scores are a bit more of a risk for lenders. As a result, they may need to pay a higher interest rate to balance out the risk to the lender.

3.   Length of repayment

Much like a standard loan, car finance can be taken out over a variety of repayment terms. Given that cars are quite a large purchase, 24 months is typically the minimum term for car finance. Alternatively, you might want to spread the cost over a longer period such as 36 months (3 years), 48 months (4 years) or even 60 months (5 years).

Paying back your car finance over a shorter term like 24 months will make the monthly cost of car finance higher. This is the result of the cost being spread over fewer instalments. However, it will generally reduce the overall cost of car finance because you will be paying the money back sooner, incurring fewer interest charges.

4.   Car finance provider

This brings us to another consideration – the provider you choose. Interest rates are one of the biggest factors when it comes to the cost of your car finance. Put simply, this is the cost added on to your loan over time as a charge for lending you the money.

Interest rates vary depending on which provider you choose, which is why it’s important to do your research before applying for car finance.

Car finance for poor credit

If you want to find a good deal on poor credit car finance, don’t hesitate to get in touch with My Car Credit. We use a large panel of trusted UK lenders to find a fair deal for all applicants. This allows you to minimise the overall cost for your new car and spread it across a repayment term that suits you.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Your Credit Profile
Return to search

Related articles

7 Factors That Can Affect Your Credit Rating

Read More

What’s the Difference Between Bad Credit & Poor Credit?

Read More

Do Credit Checks Affect Your Score?

Read More
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.
Reviews icon
TrustPilot icon

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!

Email
or call 01246 458 810

Do Credit Checks Affect Your Score?

Woman happy after checking her credit score

Credit checks are a necessary step for all types of credit applications including loans, car finance and home tenancy agreements. But for those who are already concerned about their credit rating, there is an understandable worry that the check itself might do damage to your score.

In this post, we’ll clear things up when it comes to credit checks and how they affect your score in the UK.

What is a credit check?

In short, credit checks are a way of checking your history, behaviour and associations when it comes to credit. They look at:

  • What credit you’ve taken out
  • Whether it’s been paid back
  • When it’s paid back (on time and regularly or late and irregularly)
  • Financial associations – including people with whom you share joint bank accounts or mortgages

Aside from checking your credit score online, credit checks can be broken down into soft and hard credit checks, which refer to the level of detail being assessed.

As the name suggests, soft credit checks take a brief look at your credit report to get an idea of your behaviour. These are typically an initial step in the application process to get a better idea of whether you’ll be successful.

On the other hand, hard credit checks are a comprehensive assessment of your credit history. These will typically be performed later in the process, as a final step to approve your application.

Do they affect your credit score?

Credit checks are one of the many factors that affect your credit score. But it depends on the type of check being done. Soft checks are not visible to other companies, so they won’t affect your credit score going forward. The same is true when checking your credit report yourself.

However, because hard credit checks are only done when companies are considering you for an application, they can have an impact on your score. Hard credit checks will be visible on your report, and too many in a short space of time could reduce your chances of being approved for credit. This is particularly true where your application for credit has been unsuccessful. However, the initial soft credit check should help you avoid this situation.

How we check your credit score

At My Car Credit, we only perform a soft credit check initially, to make sure there’s no impact on your credit score. This gives us a better idea of whether you’ll be successful before proceeding with the application. This in turn enables us to provide poor credit car loans to more people across the UK.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Your Credit Profile
Return to search

Related articles

7 Factors That Can Affect Your Credit Rating

Read More

What’s the Difference Between Bad Credit & Poor Credit?

Read More

4 Factors That Impact the Cost of Car Finance

Read More
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.
Reviews icon
TrustPilot icon

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!

Email
or call 01246 458 810

Can I Get Car Finance with Poor Credit History?

Car driving at night bought using car finance with poor credit rating
With the latest data from YouGov revealing 41% of British adults have missed debt repayments at some point in their lives, poor credit history is more common than you might think. There’s a shared belief that poor credit history can have a negative impact on your ability to secure finance. While there is some element of truth to this, it doesn’t mean you’re out of the running.

So, can you get car finance with poor credit history? Absolutely. Buying a car with poor credit is not always as straightforward as applying for a loan with a big deposit, a steady job and perfect credit history. However, don’t lose heart – with the right approach it can be done.

Worried your credit score may be a little tarnished? We’re here to help. Read on for our guide to securing car finance with poor credit history.

Car loans explained

Before applying for a car loan with bad or poor credit history, it’s important to understand exactly what you’re committing to. Like property mortgages, car loans offer you the freedom to secure a vehicle you may not be able to pay for upfront.

Car loans are not designed to help you purchase a vehicle you can’t afford in the long-term. Instead, they do allow you to spread out payments over a period of months or years. This means you don’t have to present a large sum of cash up front, which drastically increases the options available to you. 

Get a roadmap of your credit history

Suspect you have poor credit history? The first step to securing a car loan is to arm yourself with a clear overview of your credit history and score. A credit report will lay out the raw data and is the best place to start when assessing your financial situation. It should cover any active credit you have, as well as previously missed payments.

Hard vs soft credit checks

All reputable lenders will want to know about your borrowing history before offering you a loan, which is where credit checks come in. There are two main types of searches you’ll encounter when checking your credit history – hard and soft. ‘Hard’ checks can leave a mark on your credit score. What’s more, they give lenders insight into how many loans you’ve applied for in the past. If abandoned, hard credit checks can reflect badly on your borrowing status and damage your credit score even further.

In comparison, ‘soft’ searches aren’t visible to lenders and won’t affect your credit score. Instead, they offer lenders a good overview of your loans and finances, without leaving a visible footprint. 

Overcoming poor credit history

Struggling with poor credit? You’re not alone. There are all kinds of reasons people may be struggling with poor credit history. Here’s a few helpful ways to overcome poor credit history and secure a car loan.

  • Commit to regular repayments

One of the best ways to improve your status as a borrower is to commit to regular repayments on your existing debts. Even paying off the minimum amount shows lenders you have the capacity and commitment to repay loans. Over time this will help to improve your credit score.

  • Register on the electoral roll

Registering on the electoral roll makes it easy for lenders to check your name and address, as well as minimise the risk of fraud. It helps to present yourself as an active member of the local community and offers reassurance you’re a real person.

  • Save a good deposit

Putting together a healthy deposit can be a good way to show lenders you’re serious about saving. It also proves you have the ability to make future repayments. It improves lender confidence and can ultimately help to secure bigger loans at lower interest rates.

  • Seek help from a specialist lender

Seeking help from a specialist lender is one of the best ways to rise above poor credit history. At My Car Credit, we aim to help all applicants secure the car finance they need with quick and easy online applications.

Let us help with your car finance

As part of leading motor finance broker, Evolution Funding, My Car Credit has access to one of the largest ranges of car finance lenders in the country. We use specially developed technology to match your unique profile with the best loan products for your circumstances. And yes, this includes customers with poor credit history.

We pride ourselves on helping Brits with all financial backgrounds get behind the wheel. Why not get an application started today to jumpstart your journey to a new car loan?

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Eligibility
Return to search

Related articles

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.
Reviews icon
TrustPilot icon
Trustpilot

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!

Email
or call 01246 458 810

A Guide to Buying A Used Car Online

Two people searching online for their next used car

Online shopping has boomed in the last couple of decades, and car buying is no exception to the rule. Not only is buying a car online incredibly convenient, but you'll be able to search thousands of different makes and models, all from the comfort of your own home.

But what if you want to buy a used car? What are the differences with the sales process compared to purchasing a brand-new vehicle online, and are there any risks you’ll need to be aware of?

In this short guide, you’ll learn everything you need to know so you can search and buy your next used car online with total peace of mind.

Is buying a used car online safe?

More than likely, the very first concern you’ll have when buying a used car online is whether it’s safe.

It can be easy to focus on the negative stories you may hear about when browsing the web, but there is a perfectly safe way of purchasing a preowned vehicle online. Here are a few things to bear in mind:

Be aware of the dangers

While there are tonnes of great deals online, and many people have successfully purchased a used car online, there will always be situations where people can take advantage.

Only buy from an approved and reputable seller and be aware of online phishing. Anyone can put an ad out online, so do the proper due diligence to ensure the vehicle exists, and the registration number is valid. Sometimes, when the offer sounds too good to be true, it is!

If the worst happens and you think you’ve been a victim of fraud, the very first thing to do will be to report the issue to Action Fraud and contact your bank or building society to freeze your account temporarily.

Know your rights

Vehicles, new and used, bought through a dealership via ‘Click and Collect’ and ‘Click and Deliver’ fall under the Consumer Rights Act 2015. Buyers have a 14-day money-back guarantee to return the car if they decide they have changed their minds. This forms part of ‘distance selling regulations’.

There isn’t the same protection when buying from a private seller. However, the car must still meet the description of the advert and be road-worthy. Otherwise, the buyer may claim a refund under the Misrepresentation Act. The seller must also have the legal right to sell it.

It’s important to remember that when buying a used car privately, the buyer is responsible for ensuring that the vehicle is fit for purpose.

Do your research

As you would with any sizable purchase, it is crucial to do the necessary research into the product you are buying and check whether it matches the ad’s description.

If you are buying a used car from a local dealer, you’re given the freedom to inspect and test drive the car for yourself before parting with any cash. Where you cannot inspect the car, many dealerships and online dealers will provide you with comprehensive images of the vehicle along with videos and walk-arounds. Plus, you are protected by the distance selling regulations should a vehicle not live up to its description.

Be wise about payment

There are several ways to pay for a used car online, and there are different ways to ensure it’s safe, depending on who you are purchasing from.

When buying from a private seller, you should never hand over cash without seeing the vehicle beforehand. Reputable dealers and garages will always represent the car’s history, mileage, and condition in the advertisement correctly. However, if you’re unfortunate to come across a dodgy seller, it is comforting to know you haven’t parted with your money if the product doesn’t match the expectation.

Buying a used car from a dealer is much lower risk, and most will offer finance packages, allowing you to spread the cost across two to five years, dependent on the type of car finance you go for. 

Arranging tax and insurance for a used car

Once you’ve placed an order or made a successful bid for a used car, you need to consider the best insurance policy for the vehicle. You can browse prices on comparison websites while you wait for delivery or pick up the car and then arrange for the insurance to start on the day it arrives.

Since you’re buying a used car, you may be conscious of any rising costs. If this is the case, there are certain modifications you can make to your insurance to lower the price. These include:

  • Have a black box fitted to monitor and carefully set premiums based on your driving habits.
  • Pay all of the policy off in one go rather than monthly or weekly.
  • Ensure the car is parked on a private driveway or garage rather than at the roadside.
  • Put the car on a multi-car insurance policy.
  • Improve your credit rating.
  • Remove any unnecessary extras you may not need.

A used car will more often than not be cheaper to insure than a brand-new model, but you need to consider that the age of used cars can make them more likely to break down and need maintenance. Repairs could hike up the overall cost significantly, which is why research and inspection are so vital.

You won’t be able to tax the vehicle until it is in your possession as you will need the official licensing documents. But don’t worry, this is a quick process that can be done over the phone or online, meaning you’ll be out on the road in no time.

Is it a good idea to finance a used car?

A used car financing deal can be a superb choice if you are money conscious or wish to spread the costs over months or years. The exact length of time it will take to pay off the car fully will vary depending on your agreement with the dealer or seller, so there is room for flexibility.

The two most popular ways of financing a car are Hire Purchase (HP) and Personal Contract Purchase (PCP).

With HP agreements, the cost of the car plus interest is spread across a set period of time. Once you’ve paid in full, the car then becomes your property. PCP agreements differ slightly, with lower payments across the term but with a deferred ‘optional final payment’ (sometimes called ‘balloon payment’) at the end in order to own the car. We cover more about these two car finance options on a separate article.

To secure a finance agreement, buyers need to pass a credit score check, as well as provide proof of identification and any other requested car finance paperwork. You can also opt to pay a deposit up front, but this is not a requirement. To ensure you’re in the best position to get accepted, you’ll need an active credit history to show you can manage money responsibly such as an owning active credit card, having a mobile phone contract or being on the electoral roll.

Getting finance deals on private sales, such as auctions or online bidding sites, is much rarer and complex. Cash, a personal loan or paying with a credit card tend to be the more favoured choices.

Do you need further help with buying a used car online?

As long as you avoid the pitfalls and do the critical research, buying a used car online could be one of the best things you’ll ever do and could save you thousands of pounds compared to buying brand new. There are plenty of reliable dealers and sellers out there that make purchasing a stress-free breeze.

However, you might still want that extra hand understanding all the specifics of finding a safe dealer and calculating the finance rate payments. That’s where My Car Credit can step in.

Simply give us a call on 01246 458 810 or drop us an email at enquiries@mycarcredit.co.uk – one of our friendly specialists will be in touch shortly.

For additional information, you can also explore our the hundreds of helpful blogs and articles we have created to support you in your car buying journey.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Finding a Car
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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.
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TrustPilot icon
Trustpilot

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!

Email
or call 01246 458 810

Can I get car finance without a credit check? (a complete guide)

Man using phone to check for car finance without credit check

If you want to apply for car finance but suspect you may have a poor credit profile, or no credit history at all, you may be wondering “Can I get car finance without a credit check?”. You may be surprised to know that all regulated lenders perform credit and affordability checks as part of their commitment to responsible lending. However, this shouldn't put you off applying. There are plenty of car finance packages for those with less than perfect credit history. It is also possible to check your car finance eligibility using soft search.

No credit check car finance

If you have bad credit or even no credit, you may be searching for car finance options where you will not get a credit check. The reality is that all lenders will want to check your credit history before they loan you money.

Anyone searching for no credit check car finance will be disappointed. However, this is nothing to be worried about and there may still be options for financing a reliable car or brand-new vehicle.

Why do lenders do a credit check?

When you apply for car finance, lenders do credit checks as part of the application process to understand your financial behaviour and assess your history of handling your finances. They will be assessing your ‘creditworthiness’, or your suitability to receive financial credit. This is often based on how reliable you have been at paying back money in the past – your credit history.

Finance lenders have an obligation to lend money responsibly. It can be frustrating knowing that your finances and credit score will be scrutinised. However, this ensures that you are not lent more money than you can afford (called ‘affordability’). It also confirms that the car finance product you are sold is suitable for your circumstances.

Whilst there are some payday lenders who will offer finance without a credit check, you will be charged enormous rates of interest to accommodate the increased risk of lending. This is likely to be unaffordable for larger loans, such as buying a new or even used car.

By having a credit check done, this makes sure you are offered the correct rate of interest for your financial situation, rather than over-paying for a car finance deal.

Soft search versus hard search

When shopping around for car finance, customers can be concerned about damaging their credit scoring through multiple hard searches.

To avoid this happening, and to make it easier for you to shop around, we only do a soft credit check when you first apply. This allows us to do preliminary background checks to establish your eligibility for car finance.

The important thing about a soft credit check is that it doesn’t show on your credit file. The result is that they don’t impact on your credit score, nor do they affect your future chance of securing credit. You can have as many soft searches as you like, and only you can see them on your report. So, in some ways, this can be seen as no credit check car finance – although a hard search is required further down the line.

After a soft check, a hard search happens when you have confirmed that you are eligible for car finance and are happy to proceed with your application.

Be aware that a hard credit check will show on your credit file. It is worth bearing in mind that too many hard credit checks over a short period of time can affect your future ability to secure car finance – or any other type of finance for that matter. The reason for this is that they tell lenders about credit applications, and therefore may be a higher risk.

One of the great things about using soft search first is that you can establish your eligibility for car finance before you move ahead with a full search. When you then go on to secure car finance, so long as you keep up your repayments, you may actually improve your credit rating. You can even repair your credit file if it is damaged!

When you apply for credit or a loan, the lender will perform a credit check (sometimes called a credit search). This means that they can look at the financial information held on your credit report.

A credit check will show information such as:

  • Your name and date of birth.
  • Your current and previous addresses.
  • Whether you are on the electoral register.
  • Your credit accounts, including bank and credit card accounts, outstanding loan agreements or utility company debts. Late or default payments will show and stay on your credit report for at least six years.
  • Financial associations. These are people you are financially linked with through joint credit.
  • Public record information. This only covers bankruptcy, since civil judgments and tax liens were removed from any credit check in 2018.
  • County Court Judgments (CCJs), bankruptcies and individual voluntary arrangements (IVAs). These stay on your report for at least six years.
  • Banks and building societies. Only your overdraft is shown, not your bank statements, balances or savings.
  • Any convictions of fraud, or if someone has stolen your identity and committed fraud.

Details such as salary, religion, or criminal convictions (other than fraud) are not included.

How can I check my credit score?

You may want to check your credit history before you start applying for car finance. When checking your credit score, you won’t leave a mark on your file and it can help you understand what lenders will see.

Checking your credit history is also a great opportunity to improve your credit score by ensuring that all information held on you is correct and up to date. For example, ensuring that out-of-date financial associations don’t have a negative impact on your credit score.

Your credit score is an indication of the health of your credit file and is usually scored out of 1000. The higher the score, the better your credit rating.

There are three main credit reference agencies in the UK – Equifax, Experian, and Transunion (formally Call Credit). They hold financial information on you and are governed by the Information Commissioner’s Office or ICO.

Websites like Experian allow you to access your credit score for free.

Who will finance a car with a bad credit file?

My Car Credit has over 30 lenders on its panel and so the chances of getting you an acceptance are increased (although cannot promise guaranteed car finance). However, even people with really bad credit can get car finance, so don’t lose hope!

We have lenders that specialise in car loans for customers with damaged or poor credit. Where we match you with a lender, you will usually have to pay a higher interest rate, as you represent an increased risk for the lender. Of course, you can pay off your loan faster if you wish, and this can help to repair your credit file.

It can be helpful if you put down as large a deposit as you can afford and keep the repayment term shorter. However, it’s important not to overstretch yourself on your monthly payments.

Using a Guarantor Loan to finance a car

You may find a Guarantor Loan to be a suitable option. This is a loan where a third party that you trust (usually a family member or close friend) guarantees to make the repayments on a car loan if you fail to. Do bear in mind that you do remain responsible for the car finance agreement.

Please be aware that if you fail to make the repayments, your guarantor will become liable. If your guarantor fails to make the payments, you could both be issued with CCJs, which would affect both your abilities to obtain credit in the future.

Whilst Guarantor Loans are a great way for someone with impaired credit to get car finance, they should not be taken lightly as they come with great responsibility. You can watch a video and read more about Guarantor Loans for car finance.

How can I improve my credit score?

Another option if you have a bad credit history is to work to improve your credit score over time. The good thing about poor credit history is that it isn’t permanent. While the most scrupulous lenders might check further back for poor credit history, most details about missed payments and even court judgements won’t affect your credit status after six years.

This won’t help for car finance in the here and now, but it will make any future car finance application a little easier. Not least because you’ll be less worried about a credit check. The good news is that car finance is one of the ways to improve your credit score over time. That’s because you’ll be showing you can pay back a car loan with regular monthly payments.

Here are some other steps you can take:

Join the electoral register

If you haven’t already, you should ensure your details are on the electoral roll. Why? It’s a simple way for many lenders to check your identity and address as part of a credit check.

Check details are correct

You could also improve your credit rating by ensuring credit reference agencies have the right details for you. There are three main credit reference agencies in the UK – Experian, Equifax and TransUnion. They hold information such as your address history and financial history – accounts, payments, and any defaults or IVAs.

You can see all of this information on a credit report. If you find any discrepancies, you can report them to the agency in question, who will investigate and potentially update their records. Correcting these issues could improve your poor credit score.

Stay in the same home

Constantly changing addresses is a tell-tale sign of applicants with bad credit. In contrast, keeping the same address shows stability and security to a lender, which could improve your credit score.

Be smart with spending

If you’ve been refused credit, there’s no better way to move towards good credit history than spending wisely. Staying well within your credit limit will show that you’re responsible with your money, showing other lenders that you’ll be able to keep up with payments – and minimise the risk of late payment.

Pay off your debt

Even soft credit checks will show if you have outstanding debt. This is a big red flag for most lenders and car finance companies because it shows that your current financial situation is unsustainable. As well as spending less, try to improve your current circumstances by paying off outstanding debts. This could take you one step closer to a new car in future.

Here to help

With no credit check, car finance can’t be processed. But hopefully, we’ve shown you that credit checks are nothing to be worried about. It is more than possible to check your eligibility for car finance before you have a hard credit check. What’s more, credit checks simply ensure that lenders loan you the right amount, at the right interest rate for your circumstances.

Whilst there is no such thing as ‘no credit check car finance’, we hope we’ve helped you feel more confident about applying for car finance to buy your next car!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Application Process
Return to search

Related articles

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.
Reviews icon
TrustPilot icon

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!

Email
or call 01246 458 810

Check for car finance without affecting your credit score

woman using her ipad to check for car finance online

It's natural that customers shopping around for car finance can be concerned that an initial credit search will negatively influence their credit score. Initial credit searches usually result in a mark on your credit score - especially when they are abandoned. Very often, customers like to check for car finance before they make a decision or before they've even found a car.

At My Car Credit, we help customers check whether they’re eligible for car finance before they formally apply. This is a great way of taking the worry out of assessing your options. We do this by carrying out a ‘soft search’ credit check at the very start of your application for car finance deals.

What is a car finance soft search?

A soft search is a type of credit check which allows us to see your financial history (i.e. how you’ve managed your loans and finances) without having this information exposed to lenders.

Here’s how it works. Start by using our car finance calculator to get an idea of your monthly payments and finance rate, based on your credit profile, loan amount and preferred contract length. Next, we ask you to complete a short online application form. This car finance checker should take no longer than three minutes to complete. We’ll require a few personal details such as name, address, date of birth, contact details, and employment details. You will then receive an instant online decision on screen, with confirmation by email and text.

A tailored approach to car finance

We understand that no two customers are the same. In addition, there are many different factors that can affect the outcome of your application. Our commitment is to find you the best finance solution possible. To do this, we adhere to lending regulations. This involves placing all our prospective customers into one of two categories: prime and subprime.

  • Prime customers (those with a good credit status) will receive an actual annual percentage rate (APR) – this interest rate is a transparent one, i.e. in the majority of cases this will be the rate a customer will pay.
  • Subprime customers (those with an impaired credit history) will receive confirmation of their application. The My Car Credit team will work hard with our panel of 30+ lenders to get the best deal for your circumstances.

Why does my credit rating matter for car finance?

Your credit rating is a barometer of how well you’ve used credit in the past and currently. It gives prospective lenders an idea of how likely you are to keep up with monthly repayments. For example, applicants with bad credit or ‘poor’ credit are typically higher risk when it comes to that monthly payment.

To account for this risk, many lenders will increase the interest rate for hire purchase or PCP when applicants have poor credit. That increases the total cost of your car finance loan.

In some cases, a low credit score can even mean you’re not eligible for car finance. However, we use a large panel of lenders with a commitment to find you a car finance deal based on your monthly budget. Even if you think you’re not eligible for car finance, it’s worth using a car finance checker with a broker like My Car Credit.

Soft credit checks are a car finance eligibility checker

A soft credit check is convenient and provides all the key information needed to get the wheels in motion. However, the key benefit of a soft check is that it is not visible to lenders on your credit report. This means that it won’t affect your credit score or your future ability to obtain finance. This is true even in the event that you are declined for finance with us.

If you were to ask for a copy of your credit report, only you will be able to see the soft search on there. Within reason, you can have as many soft searches as you like without affecting your credit score. Essentially, a soft search checks for the same type of data that a ‘hard’ credit search would. The difference is, there is no risk of putting a mark on your credit file.

Because of this, we can use a soft search as a car finance eligibility checker. It gives us a glimpse into your financial situation, including your credit score, employment status, address history and whether you’re on the electoral roll. Using that quick eligibility checker, we will make a decision about your car finance agreement and whether you are eligible for car finance.

Important! Whilst the initial soft search will not leave a mark on your credit file, progressing to a full application may require some lenders to perform a hard search. This allows them to complete their full due diligence of your financial status. A hard search will show on your credit file and can be seen by other potential lenders.

What does all this mean for you?

The approach at My Car Credit means you have the freedom to shop around for car finance before making a decision. It also ensures that you aren’t penalised if you are refused car finance..

There is also no obligation or fee attached to the soft search application process with us. If you’re not sure that the quoted rate is right for your circumstances, you are free to take the information away with you. However, if you are happy to proceed with the rate you’ve been quoted, simply complete your application with us – it’s as easy as that.

Put simply: A soft search is a fantastic way of starting your car finance application without the worry of affecting your credit score. Soft search provides a very good indication of where you stand in terms of being approved for credit. It’s worth noting, it is not a replacement for checking your credit history and improving your credit score before making an application.

Use our car finance checker today

My Car Credit can help you get a new car even when other lenders have failed. That’s because we consider more than just your credit score for eligiblity. With a panel of lenders to borrow from, we can assess your loan based on your monthly budget to dig deeper into eligibility – all in a short space of time.

Sound good? It all starts with our car finance calculator. Enter your loan details today to see whether you’re eligible with our panel of lenders.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Your Credit Profile
Return to search

Related articles

7 Factors That Can Affect Your Credit Rating

Read More

What’s the Difference Between Bad Credit & Poor Credit?

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4 Factors That Impact the Cost of Car Finance

Read More
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.
Reviews icon
TrustPilot icon

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!

Email
or call 01246 458 810

I am self employed, can I still get car finance?

Self-employed lady wants to know if she can get car finance

Well, if you're self employed and looking for car finance, the short and positive answer is ‘yes’! The key thing will be proving your income, along with the usual checks on your credit score. We take you through the ins and outs of getting car finance as a self employed person. What's more, you'll get all the information you need to make your car buying journey as easy as possible.

Proof of income when self employed

The first thing that finance lenders will be looking for is proof of steady and regular income. Dependent on your credit score, the lender will probably want to see proof of income on paper. The reason for this is to assess your credit criteria and your ability to keep up with monthly repayments.

To work out your average income, lenders will usually total your income in the last three month’s bank statements and divide it by three. This then allows them to get a credit limit based on your proof of income. This can vary slightly if you have a lower credit score. In this case, you may be required to produce in excess of three months’ worth of bank statements or payslips to prove your income.

Monies that are authorised by lenders must be from a UK bank account in yours, or your spouse or partner’s name. Cash-in-hand cannot be used as proof of income. If the bank account is in your spouse or partner’s name, they will also need to be added to the finance application. Most finance companies will also not accept tax returns as proof of income.

Employment and address history

The lender will need to see a minimum of three year’s employment history, three year’s address history, and you’ll need to have been a UK resident for a minimum of five years.

Lenders are looking for evidence of stability in employment and address history – the longer you have been at your current job and address, the better.

Applying as a business

If you’re applying on behalf of your business, there are many things you need to take into account. Firstly, your business will need to have been registered and trading for a minimum of two years. Usually, lenders will take your net profit as financial reassurance. In addition, most will require it to be at least double the amount of the money you are looking to borrow.

When applying as a business, you’ll also need to decide whether the car being financed will be for business use. Where the business use of the car would be deemed excessive or abnormal, your application may be rejected by lenders.

As an example, some finance lenders won’t finance a car for self employed taxi drivers. This is because taxi drivers will be using the car much more frequently and adding more mileage than normal. This affects the car’s value more than if they were just using it for everyday driving.

What should I do if I’m struggling to show proof of income?

Focus on making sure that your credit profile is as strong as possible. We recommend ensuring you’re on the Electoral Roll. This improves your credit profile and proves your identity through a government-run system. In turn, this reassures lenders that they are not at risk from fraud or identity theft. There are also many other ways to improve your credit score.

If your credit rating is good and you can afford to, putting down a deposit is a good idea. Where possible, try to put as much money towards the car as possible for your circumstances. This helps to share the risk of the loan with the lender and give them further reassurance to approve your application.

Finally, consider using a guarantor or submitting a joint application. This lowers the risk for the lender and can increase your chances of getting accepted. However, please be sure you have a full understanding of your responsibilities when taking this route.

Additional information

Essentially, the more information the lender has on you, the more security they have. This can greatly improve the chances of them approving your car finance application. However, make sure that you are as honest as possible. You shouldn’t attempt to overstate your income. You may hope to increase your chances of being approved or get you a better rate. The downside is that finance lenders may see this as fraud, which could have serious implications.

Going self employed is many people’s dream – working for yourself means being responsible for your own success and directly reaping the rewards of your hard work. Driven by changes in the economic climate and helped along by the digital revolution, figures show that self-employment in the UK has increased in popularity. By the end of 2019, there were £5 million self employed people in the UK, up from £3.2 million in 2000. We want to help anybody that’s self employed to get car finance.

So, don’t lose heart if you’re self employed and want a car loan. Be assured that there are many different ways to obtain car finance. We hope our advice has been useful but if you need any more information about self employed car finance, we’re here to help!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Eligibility
Return to search

Related articles

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.
Reviews icon
TrustPilot icon
Trustpilot

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!

Email
or call 01246 458 810

Is there such a thing as guaranteed car finance?

Man signs agreement for buying car on finance

Put simply – no. Just as there are no guarantees in life, there are no guarantees in car finance. As such, we would advise you to be very wary of any company that suggests they can guarantee car finance to you. At My Car Credit, we don't offer any guarantees. However, we always do our absolute best to get you accepted for car finance, so you can buy the car that you want.

The truth about Car Finance & ‘guaranteed car finance’

The reality is that the ‘guaranteed car finance’ claim is often a marketing ploy. The goal is to make you think that you’ll definitely be able to get a loan regardless of your circumstances. If companies offer guaranteed car finance, they think they’ll attract more customers. And they usually do – often people with a poor credit rating.

In truth, guaranteed car finance simply doesn’t exist. In fact, there have been laws in place since 2010 which state that making a false or misleading claim around finance guarantees for consumer credit is an offence. Additionally, advertisements that contain just the phrase ‘loan guaranteed’ are also banned. The advert would need to include terms and conditions regarding the individual’s credit status to be allowed. 

‘Guaranteed car finance’ schemes

Found a few companies that offer guaranteed car finance? Despite what we’ve said above, there are some providers offering what they call guaranteed car finance. Some finance companies will offer guaranteed car loans to reel in vulnerable customers, without any actual guarantee. Other lenders will create some sort of false guarantee and claim that it amounts to guaranteed car finance.

Whatever the case, watch out for ‘guaranteed car finance’ schemes which are designed to catch you out. A common scheme is to ask for a ‘guaranteed car finance enquiry’ fee. Usually this fee and the offer it is meant to guarantee are closely attached to complex small print (i.e. legal jargon). In order to decipher it, you’d need to be a qualified lawyer!

Any finance lender suspected of dealing with customers in this way can end up with a full Financial Conduct Authority (FCA) investigation into their conduct. If upheld, this could lead to them being fined or forced to close.

They’ll carry on for as long as they can get away with it. But when they get caught out, there’s rarely any compensation for customers with a bad credit history, who have been irresponsibly sold car finance – usually with sky-high monthly repayments. You’ll find that your personal circumstances are even worse, giving you less chance of improving a bad credit score.

In summary – almost every guaranteed car finance claim is a scam.

How car finance agreements really work

Car finance agreements are purely based on your individual circumstances and your credit profile. This means that there will inevitably be some individuals who aren’t eligible for car finance – hence why guaranteed car finance doesn’t make sense.

We’ll go out of our way to help you get approved for car finance, including bad credit car finance. However, it’s our lenders that have the final say on your car finance application after fully assessing your current financial situation, affordability and credit profile.

A credit profile is a document that contains information regarding your creditworthiness and credit history. Your credit profile includes: what types of credit you hold, the length of time your credit accounts have been open for, if you made your repayments on time, and any applications for new credit.

Lenders are far less likely to lend you money if they are not convinced you can repay them. This would naturally be bad business for them. In addition, it is not ethical for them to lend money that could push you into financial difficulties. So, it’s paramount they only offer car loans if they believe you can afford the monthly payments.

How to get accepted for car finance

Whilst we cannot offer guaranteed car finance, there are ways you can improve your chances of getting accepted for car finance for a new car, whatever your credit history.

  • Improve and maintain your credit score
    Your credit score is the main factor that is assessed when you apply for a car loan. It reflects your ability to keep up with monthly repayments. This means it’s important you keep your score as high as possible. There are many things you can do to improve your credit score. Not only will a good credit score improve your chance of an acceptance but you will also get a better rate. However, don’t lose heart if you have a low credit sore as there are still plenty of options.
  • Put down a deposit on your car loan
    Paying an upfront deposit on your car loan makes you less of a risk to the lender. For bad credit car finance, there may be a larger deposit required. Not only is the amount owed on the vehicle reduced but your monthly payments will also come down. Once again, don’t despair if you can’t pay a deposit. There are plenty of no deposit car finance options available!
  • Opt for a Guarantor Loan
    A Guarantor Loan is where a third party (usually a family member or close friend) agrees to pay your loan if you are unable to. This lowers the risk for the lender, as it’s essentially guaranteed car finance on their end, improving your chances of acceptance. It can also lower the interest rates you are offered. Guarantor Loans are a big responsibility for both parties and shouldn’t be entered into lightly. Make sure you are clear on how a Guarantor Loan works before proceeding.

What we can offer

My Car Credit has access to a large panel of lenders. These have all been vetted and approved by the FCA for their trustworthy operations and the quality of their service.

Our large network of lenders increases the chances of you getting accepted, across all credit profiles (from poor to excellent). Our unique underwriting policy prioritises the best outcome for you, the customer. This ensures we give you the best available deal on car finance for your circumstances.

You can trust My Car Credit because we are part of Evolution Funding, the UK’s largest vehicle finance broker. We are proud to be award-winning market leaders in the industry. We have helped thousands of customers get the car they want; at the price they can afford. We are also regulated and monitored by the Financial Conduct Authority (FCA). In conclusion, you can borrow for your next car safe in the knowledge that we are professional and reputable.

What about bad credit car loans?

At My Car Credit, we understand that some applicants have a poor credit history. That’s why we don’t just turn down drivers because of a poor credit score. As a leading UK car finance company, we aim to offer car finance packages to as many people as we can.

Unlike traditional lenders, we have a network of over 30 companies. Our team will work tirelessly to compare your car finance options and find the right deal despite a bad credit score. Whatever your credit rating, our goal is to offer you a car finance agreement with monthly payments you can afford.

If you have any questions, our Car Credit specialists are here to help. Finally, you can get an instant decision, that won’t affect your credit file, by applying today.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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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.
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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!

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or call 01246 458 810

Can I Get a Car Loan with a Poor Credit Score?

Car driving bought with a low credit score loan

It’s common for lenders to carry out a credit check on anyone who applies for a car loan. This is usually a ‘soft search’ initially. Credit checks can lead to those with poor credit scores shying away from applying due to the fear of rejection. However, you’ll be surprised how easy it is to successfully obtain a loan by making a few minimal changes.

In this short guide, we’ll explain everything you need to know when applying for a car loan with poor credit. In addition, we’ll cover how to get the best deal by ensuring your credit score is up to scratch.

What is a car loan?

Finding the right car within your price range can be a challenge. But, with a car loan, you can spread the payments out over a course of several months or years. This is a great way of significantly increasing the options available to you.

Two popular forms of car loan are a personal loan and Hire Purchase (HP). A personal loan will see someone borrow money from a lender, bank or building society. This allows them to have instant ownership of a car. In contrast, HP will have the individual pay an initial deposit (not always required) with fixed monthly payments for the next three to five years. They effectively hire the vehicle over the period, with the option to purchase at the end.

At the end of the term, they will be offered three choices; to either return the car to the supplier, keep it, or trade it in for a replacement. However, you must be careful not to miss the repayments before the end of the term. In these cases, the finance company may decide to repossess the vehicle to settle the debt.

How can you improve your credit score?

A lender will perform a credit check to ensure that the person applying can afford the monthly payments. People who obtain an excellent credit score will have demonstrated a firm grasp of their finances. In theory, this makes for a reliable choice for lenders.

Those described as having a ‘thin’ credit history will have a history of missing payments. Alternatively, there may be little concrete evidence of financial security, such as never owning a credit card or bank account. A higher credit score will open more doors. This could include a much more comprehensive range of car loan options. These are often accompanied by much more favourable interest rates.

Here are some simple but effective ways of raising your credit score.

1. Identify the problems in your credit report

Before you apply for a car loan, it will be wise to get a free copy of your credit report. This will give you an idea of any pitfalls that may scupper your loan request. There may be some glaring mistakes you are making in the way you handle your money, damaging the profile. It is also worth ensuring it is up to date and doesn’t contain any errors or inaccuracies which could unfairly affect your score.

2. Apply for a credit card and use it sensibly

Credit cards have a strange reputation of being a poor way to save money. But the truth is that as long as you’re making repayments on time, they will put you in good stead to improve your credit score. Proof that you can budget and regularly meet repayment deadlines will help you secure a more competitive car loan deal.

3. Stay away from bad credit

If you’ve ever been financially linked with someone you know has bad credit, such as a joint account or shared mortgage, it may lower your credit score. If this is the case, it will be a good idea to issue a notice of disassociation. This informs lenders that you are no longer financially linked and should be judged on your own merit.

4. Settle any loans

Now is the time to settle those loans and reduce your debt as much as possible. This is easier said than done, but to get behind the wheel of the car you desire you may need to work at it.

What are my other options for obtaining a loan?

Start by crunching the numbers on a car loan calculator. You may consider making slight changes to the car loan variables to see how it can help. No matter how low your credit score, some changes can ultimately work in your favour to help you get a car with poor credit history.

1. Pay a larger deposit

Simply put, a larger up-front deposit will mean your monthly payments will be reduced. This in turn minimises the risk for the lender in ensuring they are met. It can be frustrating as you’ll be forking out a potentially huge chunk of money. That said, it is often a sure-fire way to improve your chance of getting the deal.

2. Pay a higher interest rate

Someone with a low credit score will often need to accept a higher interest rate than the advertised representative rate. Again, it may seem frustrating on the face of it. However, don’t despair as it tends to mean only a slightly higher monthly payment.

3. Choose a lower annual mileage limit

Opting for a lower annual mileage limit can result in much lower costs month to month. This is because the car will be worth much more to the dealer at the end of the loan. This is usually related to fewer miles on the clock and less wear and tear.

However, you will want to keep the figure realistic. Going over your allowance will end up costing you dearly. You will find that there are harsh penalties that charge you for every extra mile taken.

4. Choose a used car

Opting for a loan on a used car will ultimately see you borrowing less money from a provider. This improves the possibility of obtaining a loan, even with a poor credit score. There is much less risk for the dealer as the car will already have depreciated in value. However, this doesn’t deflect from the fact that used cars are mostly reliable and of good quality.

If you worry about being able to afford to buy a car, this may be the best and most sensible option.

Need help getting a car loan with a poor credit score?

Take the headache out of getting a car loan with a straightforward and simple chat with our friendly specialists. Find out more about how we can find the right deal for you no matter how your credit score may look.

You’re not in this on your own, and we’ll support you every step on the way to get you on the road with the car of your dreams. Give us a call on 01246 458 810 or email enquiries@mycarcredit.co.uk to find out more

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Return to Car Finance Options
Return to search

Related articles

What is Hire Purchase? – Simple HP Explanation

Read More

Advantages of Cars on PCP with No Deposit

Read More

How Do Car Finance Calculators Work?

Read More
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.
Reviews icon
TrustPilot icon
Trustpilot

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!

Email
or call 01246 458 810