You may or may not have heard the term bad credit car finance before, but it has been helping thousands of people in the UK obtain their dream car when they thought it wouldn’t be possible. So, what is it and how does it work? Carry on reading for a short overview on bad credit car finance and to see if it is something that may be of use to you.
What is Bad Credit Car Finance?
Bad credit car finance helps people with low or poor credit obtain a car finance deal. This covers any car finance deal that a lender is willing to give to someone with a less than average credit rating. A bad car credit finance deal allows you to spread the total amount of buying or leasing car over a fixed period of time. Payments are taken monthly, just as they are with most other car finance deals. However, bad credit car finance doesn’t usually require the need for a deposit or lump sum payment at the start of the deal.
This is an ideal option if you have poor credit and low savings, as it avoids the need to make a large upfront payment, allowing you to focus on making the monthly payments only. You will need to prove that you are able to afford to keep up with payments, as you would with any other auto finance deal.
How Does Bad Credit Work?
To begin with, the finance provider you choose will conduct a soft credit search on you, rather than a full hard credit check. This will provide a clear indication on whether or not they can source credit for you, and the type of credit they can obtain. However, this initial stage of application will not affect or show up on your credit score.
This allows lenders to ascertain whether or not they can find a suitable finance deal and allows you to decide whether or it is right for you. If both parties are happy, it will then progress onto a full credit application. This will be marked on your credit report.
The company you choose for a bad credit car finance deal will have a network of trusted lenders that can help you obtain finance. The trusted dealerships will be handpicked by their experts, providing quality cars even if you are in arrears, have CCJs, IVAs or a debt management plan.
Don’t Let Bad Credit History Hold You Back
With this type of car finance, more focus and importance is placed on your personal and current situation, and how affordable a car finance deal is for you, rather than you credit history. So, having a bad credit history doesn’t necessarily mean that you won’t get finance. Most providers offer an easy online application form for your initial soft search, and they will then get in touch if they feel they can progress your application to a hard search.
Don’t let bad credit history hold you back if you want a new car, choose a bad credit car finance deal to get the wheels of your dreams!
