If you have a poor or bad credit rating, it can leave you feeling less than confident when looking to approach lenders for financial help. As many lenders use your credit rating to determine your financial history and ability to pay, if yours is less than perfect, many will simply turn you down.
Whilst this is designed to ensure responsible lending is followed and those who apply for credit can afford to do so, it can leave those with bad credit stuck in the middle with a lack of options, even if your finances are in a much better place now than in the past. So, if you have bad credit and you’re looking to purchase a new car, what choices are there and is it still possible to get finance on a car with bad credit?
Find Better Options for You
Quite simply, it is still possible to finance a car with a poor or bad credit rating, as long as you are looking in the right places for financial support. If you apply randomly to any lender providing car finance hoping that this time you’ll be accepted, don’t be surprised to receive more declined applications. If you are looking for car finance with bad credit, it’s best to do your research first and seek out specialist lenders who are more likely to offer the finance you’re seeking. Ideally, you want to turn the odds in your favour and find a lender who is willing to assess your application based on your affordability. If you can do this, your chances of being approved will considerably increase.
How to Purchase a Car with Bad Credit
To be successful with your application for car finance if you have bad credit, you’ll need to be fully prepared. Whilst these specialist lenders can help, they can by no means guarantee any car finance approval, so making sure you have checked your finances and eligibility first will help speed up the process and place you in a good position. It’s important to take the time to review your current financial situation. Whilst having bad credit, you’ll need to ensure that your current income and outgoings do not leave you with a negative balance each month. If you are left with a disposable income that you can comfortably make repayments with, you’ll need to be able to prove it to the lender.
Be Prepared to Support Your Application
Whilst also checking your finances for what you can afford to pay, you should carefully read the eligibility criteria for the car finance you want. This will inform you of what documents you will need to provide to support your application. This could be your last few months bank statements or photo ID such as your passport or driving licence. If you apply without having checked you have these documents to hand, then your application may halt before it begins. Check the requirements and collate all the information and documents you’ll need first. This way you’ll be prepared for anything the lender requires from you and speed up the process of being approved.
Overall, if you take the time to find a specialist lender to help you with car finance despite having a poor or bad credit rating, and have all the relevant information to hand that you’ll need, your chances of approval will be improved.