Car Finance with Bad Credit: What Lenders Look At and How to Improve Your Chances

Yes, you can often get car finance with a poor credit history, but nobody can guarantee it. Some lenders specialise in customers who have missed payments, defaults or a thin credit file. Expect a higher interest rate and possibly a larger deposit, and expect the lender to check that the repayments are affordable for you.

What counts as bad credit?

There is no single score that every lender uses. Each one makes its own decision from your credit file and your application. Things that usually count against you include:

• missed or late payments

• defaults or county court judgments (CCJs)

• an IVA, debt relief order or bankruptcy

• very little credit history, or not being on the electoral roll

• several credit applications in a short time

How does bad credit affect car finance?

Lenders price for risk. With a weaker credit history you may be offered a higher APR, asked for a bigger deposit, or approved for a smaller amount than you hoped. Every lender must also check affordability, so your income and outgoings matter as much as your score.

How can I improve my chances before I apply?

1. Check your credit report. You can see it free with Experian, Equifax and TransUnion. Ask them to correct anything that is wrong.

2. Get on the electoral roll at your current address.

3. Pay everything on time. Recent months carry the most weight, so set up direct debits.

4. Bring card balances down so you are not close to your limits.

5. Avoid lots of applications. Each full application leaves a hard search on your file. Ask whether a quote uses a soft search first.

6. Put down a bigger deposit. Borrowing less lowers the lender’s risk and your monthly payment. A part exchange can count towards it.

7. Choose a car that fits the budget. A cheaper car over a sensible term is easier to approve and easier to live with.

Should I use a guarantor?

A guarantor is someone, usually a relative or close friend, who agrees to pay if you cannot. It can help an application, but it is a serious commitment. If you miss payments the lender can pursue your guarantor, and their credit file can suffer too. Only consider it if you are both confident the repayments are affordable.

What happens when I apply?

• You give your address history, employment and income details.

• The lender runs a credit search and an affordability check.

• You may be asked for payslips or bank statements, proof of address and your driving licence.

• If approved, you get the APR, monthly payment, term and total amount payable in writing. Read them before you sign.

Common questions

Will applying hurt my credit score?

A full application leaves a hard search that other lenders can see. One or two will not usually matter. Several close together can.

Can I get car finance with a CCJ or default?

Sometimes. It depends on how old it is, whether it is settled, and your situation now. Defaults and CCJs stay on your file for six years.

What if I am struggling with debt already?

Taking on more credit may not be the right move. Free, impartial help is available from MoneyHelper and StepChange.

Car finance in Barnsley with anycolourcar.com

We work with a panel of lenders including Close Brothers, Blue, MotoNovo, Black Horse, DSG and CarFinance 247, so we can look for an option that suits your circumstances. Finance is subject to status and affordability checks, and we cannot promise an approval. We are a credit broker, not a lender, and we receive a commission from the lender for arranging finance.

See our finance options, browse cars in stock, or call Sales on 01226 574410 for a straight conversation about what is realistic.

This guide is general information, not financial advice. Updated October 2026.