When you’re just starting to build up a credit history, getting car finance might, understandably, seem a bit trickier. However, with a bit of planning, you can find the right route to get behind the wheel. Here’s how.
Try guarantor car finance
Adding a guarantor to your finance application can make a big difference. A guarantor is someone – usually a close friend or family member – who backs up your promise to repay, so they’d cover the payments if you can’t.
While this can improve your chances of getting approved, it’s extremely important to pick someone you trust, who also trusts you to keep up with payments. After all, you don’t want to strain any relationships if things get tough.
Explore other finance options
If the guarantor route doesn’t suit you, don’t worry, there are other ways to go. Consider starting with your bank, especially if you’ve had an account there for a while.
Banks may be more flexible and willing to help with a car loan. And if you can swing it, putting down a larger deposit on the car could also strengthen your application. Not only does it show commitment, but it also lowers the total amount you need to borrow.
Dealership financing and personal loans are also options worth considering. Each choice has its pros and cons, so think about what fits best with your budget and overall situation.
Specialist lenders for limited credit
Some lenders specialise in helping people with no or limited credit history. These lenders may take a more flexible approach when it comes to assessing your application.
Take your time to research these options, get multiple quotes, and make sure you’re clear on the terms. Keep in mind, they’re often more understanding of no-credit cases, and can help you take those first steps in building up your credit while you get the car you need.
If you’ve had a few bumps in the road with credit, you might wonder if getting car finance is possible. The truth is, having bad credit doesn’t automatically rule you out for car finance, but it does mean lenders will take a closer look.
When you apply for car finance with bad credit, lenders take a number of factors into consideration. They’ll look at your credit history to see if you’ve missed payments or have any debts outstanding, but it’s not always a straightforward ‘yes’ or ‘no.’
Many lenders take a case-by-case approach, which means they weigh your recent financial habits more heavily than past issues. So, if you've been making positive steps, like paying bills on time, it’ll work in your favour.
Every lender has its own set of criteria, which is why understanding what they’re looking for before you apply is essential. Some might focus more on your current employment status or how much you’re willing to put down as a deposit, rather than your credit score alone.
Credit checks are an important part of the process. Lenders want to understand a bit about your financial history to make sure the loan is a good fit, both for them and for you.
Credit checks help finance providers see how you’ve managed borrowing in the past. This gives them a clearer idea of whether monthly car payments will work comfortably with your budget.
While some companies might advertise ‘no credit check’ finance, those offers are rare, and they’re worth approaching with caution. These deals often come with much higher interest rates to cover the lender’s risk, which means you could end up paying a lot more overall for that new car.
In the end, the credit check is there to keep things fair for both sides. Lenders use it to make responsible lending decisions, and for you, it helps make sure your monthly payments are manageable without causing avoidable financial strain.
Improving your credit score can really open up your options, whether you’re thinking about car finance or future purchases. Your credit score is essentially a record that helps lenders understand how you’ve managed money in the past — and even if you’re just starting, there are some easy ways to build it up.
First, make sure you’re registered on the electoral register. This helps confirm your identity to lenders, which can make a positive difference.
If you haven’t already, setting up a bank account is also a great move, as it allows you to start building a record of your financial activity.
Another step is to set up automatic payments for any bills you have, so you don’t have to worry about missing them. Even one missed payment can hold back your score, so this is a great way to keep things on track.
Lastly, if you can access a small line of credit, like a credit card or store card, using it for small purchases and paying it off in full each month shows that you can manage credit responsibly.
These small actions can help strengthen your credit score over time, setting you up for more borrowing options and better rates when you’re ready.
Remember, even if you have no credit history, there are options out there — whether that’s finding a guarantor, exploring specialist lenders, or starting to build up your credit history for the future.
It’s important to go for a finance option that makes sense for both your needs and your financial situation. Think about your monthly budget, and make sure you understand what’s expected in terms of repayments.
Finally, if you’re new to credit, taking small steps to build up your credit history can pay off in the long run. It’s worth setting yourself up for even more choice down the road. Whatever route you decide on, take your time, do your research, and you’ll find the right fit for getting you behind the wheel.
