Will a poor credit score stop you buying a car?
Buying a car is one of the largest purchases many of us ever make, and that’s why many of us find ourselves taking out a loan to cover the cost. But for those with a poor credit rating, it can be more difficult to find a company willing to lend them the money. Inevitably, it tallies that the better your credit score, the better your chances of getting a good deal on a loan. If you find yourself getting refused a loan, it can be really disheartening, but whilst finding a loan with a poor credit history is more challenging, it definitely IS possible to secure the funds you need.
Know your credit rating
As scary as it might be, it’s really important that you know your credit rating before you start to apply for a loan. You can use a free credit rating provider such as noddle for this. It’s a good idea to register and check your report regularly so that you make sure there are no unusual debts lurking on there and you can focus on improving your score if you need to.
If you have a poor credit rating, then sadly many of the main “big” high street lenders probably won’t lend you money. Applying and being refused is actually really bad for your credit score, so you want to avoid that if you can.
Once you know your credit rating, you will be able to figure out which companies you should be able to approach. You can use a loans eligibility calculator to get a good idea of which companies are likely to give you credit and cut out unnecessary searches showing on your credit report.
What to do if you have a poor credit score.
Finding out you have a low credit score can be pretty disheartening. Hopefully, by investigating your credit report, you can figure out why you have a low score and start to make changes to improve that.
If you’ve had debts in the past that you’ve been unable to pay, then you need to get those cleared and start to make slow improvements to your credit report. There are lots of things you can do to improve your credit score, so try not to panic if you find yourself in this situation.
Buying a car with a poor credit score.
Having a poor credit rating doesn’t mean that you’ll never be able to finance a new car. It just makes things a little bit trickier. You might need to accept that if you need to take out a loan whilst you’ve got a poor credit rating, then you’re going to have to pay a higher rate of interest. Whilst this may feel harsh, it’s something that loan providers do to cover the risk they’re taking by lending to you.
Getting car finance with bad credit is definitely not impossible though. Take some time to research which providers are likely to lend money to you and figure out realistically how much you can afford to pay back each month. It’s a good idea to have a decent chunk of money to pay towards the car upfront if you can so that you’re borrowing as little as possible.
So, if you find yourself in the situation where you have poor credit but you need to borrow money in order to buy a car, then you do have options. Take some time, do your research and once you’ve secured your finance, spend some time working out how you can improve your credit score for the future.
