Bad Credit Car Finance

Compare Car Finance for Bad Credit with low rate guarantor loans & borrow upto £15,000

What is Bad Credit Car Finance?

A loan for your car can be helpful when you want to pay for a new vehicle or repair a current one.

This can cost thousands of pounds – which is a large amount in one go. Ideally, you would save for it, but circumstances change; your car may be written-off, or you need extra seats for a growing family. That’s when a car loan could come to your rescue. These situations can spring up for anyone, whether you have a good credit history or bad.

When you have bad credit it can be trickier to get traditional lenders or banks to agree to lend you money. This is where a guarantor loan for car finance can come in. Bad credit guarantor loans can make a huge difference for those looking to buy or repair a car.

A guarantor car loan, or car finance, could provide you with enough money to buy or repair a vehicle. You then repay the loan over a length of time. A guarantor loan can allow those with a bad credit score to still access these car finance options.

Through some loan options, if you’re buying a car, you own the vehicle. That’s not the case with a guarantor loan; the vehicle won’t be used as security or collateral for a loan. Most lenders will provide fast approval, while poor credit isn’t a deal breaker.

Having a guarantor car loan makes you a cash buyer. This could help you get a great deal on your next car – or for vital repairs.

How to get car finance if you have bad credit?

Bad credit doesn’t have to be a limiting factor in applying for car finance. There are a number of lenders that specialise in providing loans for those in these situations. Some of these can have high rates, but in order to get a low rate bad credit loan a guarantor loan is an excellent option. If you want to know more about what a guarantor loan is, then read our extensive guides on guarantor loans.

A guarantor loan for bad credit can allow you to borrow money when other lenders may not be keen to lend. Essentially, the borrower will nominate someone to act as a guarantor for the loan. This means that if the borrower defaults on any payments for any reason, the guarantor will pick them up and make them in their place.

A guarantor loan can be used to buy a car on finance, and keep the repayments and APR relatively low in comparison to other bad credit loans. You can compare guarantor loans for bad credit car finance through us today and find the best deal possible.

What is a bad credit score?

A credit score is a number created by Credit Reference Agencies (CRAs) to rate someone’s credit history. This number is then used to determine whether you have a good, fair or bad credit score. To calculate it these agencies look at your credit history over the last 6 years.

Credit history looks at your financial history over a period of time. It tracks when you took out credit, made payments for bills, direct debits and similar. It shows when you have made or missed any payments and any times you have gone into debt. As it’s something that looks at your financial situation over time, there are some instances where you may appear to have a poor credit score just because of a lack of credit history. This is particularly true of younger people, who haven’t had time to build up their credit.

A bad credit score occurs when you have a number of issues in your credit history. This could happen from a number of missed payments, defaulting on your mortgage, being refused a credit card or agreement, falling into debt or other issues. It could also simply be because you’ve not spent time building your credit score.

The actual score that denotes a bad credit score changes depending on the agency, and some lenders may have their own criteria for what makes a bad credit score.

How can I improve my credit score with a guarantor car loan?

Having a bad credit score isn’t the end of the world, there are still options for you to open other credit agreements and borrow money. It’s also possible to improve your credit score by following a few simple steps. It’s not a quick fix, as your score is based on 6 years of financial history, but following these can help:

  1. Make sure you’re registered on the electoral roll. This is the first and simplest step that must be made.
  2. Close any unused credit or debit cards. Having access to credit and not using it can have a negative impact on your credit score.
  3. Make payments on time and in full. Missing payments can cause your credit score to drop, so make sure any current agreements you have are being paid promptly.
  4. Pay off your existing debts. Make sure that you pay off any debts you already owe, such as credit cards, bills or similar. Doing so will show that you can effectively manage your debts and finances.
  5. Consider getting a credit card. Using a credit card regularly, and paying off your debts in full each month can reflect well on your credit history.
  6. Only apply for any credit agreements you’re sure you’ll be agreed for. Being refused for a new credit agreement will show up on your credit history and can negatively impact your overall credit score.

Another option for improving your credit score is to take out a guarantor loan. You’re more likely to be approved for a guarantor loan than other loans when you have bad credit. If you then make all of your payments efficiently it will reflect well on your credit history and as such your credit score will improve. Using a guarantor loan for car finance is a great way to do this.

If you’re considering being a guarantor it’s worth understanding how being a guarantor can affect your credit history.

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Compare & apply for a guarantor car loan

If you’re ready to compare guarantor car loans for bad credit, you can use the tool on our homepage. As experts in all types of guarantor loans, whether it’s for cars, businesses or debt consolidation, we can help you find the best loan option for your own unique circumstances.

If you’re ready to apply for a guarantor car loan then you can do that through us too. We’ll then pass your application over to the lender of your choice and you’ll be able to buy a car or make the repairs you need in no time.