How to finance a car with a bad credit score

  • Posted on: 1 February 2017
  • By: Zak Rowley
How to finance a car with a bad credit score

Buy a car, whether it is new or a used one, is a significant expenditure. For most people, it entails getting some of the forms of the car loan. But not everyone has a great credit score. Some people have poor credit, but that does not mean you cannot get a loan for your car. If you want to know car finance for bad credit, you have come to the right place.

Your credit score

Your credit score is, of course, vital when you set out to get a loan. However, Call Credit, Equifax, and Experian all have their methods of calculating your credit score. So if you have a low credit score with Equifax and your lender is using Call Credit to check your credit, there is not point worrying about low credit score. Even if you and your lender are using the same source credit checking the score, there are other factors involved in car finance for bad credit.

Income and employment

While your credit score is important to your lender, another very factor here is income. If you have low income but good credit, the lender will still be hesitant to give you loan as you will have trouble repaying the loan with low income. However, if you have a high income but a bad credit, the lender would be more willing to give you credit as you will be in a better position to repay loans. You employment itself also matters. If you have just started a new job, it is better to wait a few months before applying for a car loan. Irregular jobs also reduce your chance of getting car finance, regardless of your credit score.

Personal loans

These are another way to car finance for bad credit. Personal loans are easier to pay off rather actual car loans from institutions. You can even sell your car if you cannot make the repayments. However, the minimum limit for a personal loan is between £7,500 and £15,000, so keep that in mind in case you want a lesser amount.