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Bad Credit Car Loans Advice – FAQs

BY Rachel | 13 March, 2017 | no comments

People often understandably, get concerned about whether or not they’ll be able to get a car loan with a bad credit history.

Here are some frequently asked questions on the topic plus some advice.

Is a ‘bad credit history’ and CCJ’s the same thing?

No – not necessarily.

A CCJ stands for ‘County Court Judgement’ which usually indicates a court has ruled against you in a case where you owe someone money and either aren’t paying it back or failing to do so on the agreed basis.

Your ‘credit history’ is an online record of the way you conduct your financial affairs. A ‘bad credit history’ suggests you have had problems in the past with failing to repay loans, meet an agreed payment schedule or being turned down in loan applications etc.

It’s perfectly possible to have a bad credit history without CCJ’s.

Why do car loan providers look at credit histories?

If you were lending money to someone you didn’t know, you might wonder about whether or not you’d ever get it back.

Professional car finance providers are no different. They use the vast online repositories of credit information and specifically your credit history, to try and assess how likely it will be that they’ll get their money back in line with the plan they and you would agree at the outset.    

It’s actually perfectly fair that lenders try to understand the risks they’re taking in advancing a loan.

If I have a bad credit history, does that mean I won’t get car finance?

No, not at all!  This is a commonly-encountered myth in fact. Bad credit car finance is available.

Being realistic though, what you should realise is that it might mean two things:

  • you may need to approach providers of car finance who are sympathetic towards applicants with a poor credit history;
  • you may need to pay a higher rate of interest due to the greater risk any potential lender will be taking.

Remember, no lender is judging you.  Having a poor credit history doesn’t mean you’ve ‘misbehaved’ and the circumstances leading to it could have been beyond your control, including divorce, illness, redundancy etc.

So, specialist providers of car finance for bad credit history cases are most certainly not ‘looking down on you’. They will probably have seen many instances of a far worse credit history than yours.

Can I be guaranteed a loan irrespective of my credit history?

No – nobody can guarantee in advance that you’ll find finance in situations where you have an exceptionally problematic credit history.

However, such cases are relatively unusual. So, speak to a specialist anyway.

Why have I been refused car finance due to my credit history?

It’s impossible to say without knowing your exact circumstances.

A very common cause though is that you may have applied to the wrong lender. Some lenders are very unsympathetic to bad credit history applications whereas others welcome them.

As stated above, you should find a specialist provider of car loans for people with credit history issues.

What do I do if I don’t agree with my credit history record?

It’s sometimes the case that credit history records can contain errors. That sometimes might work in your favour but perhaps more commonly, not!

You have certain statutory rights in this respect. Space here doesn’t permit a full discussion of them but one of the major sources of credit history data offers some useful advice here.