How to finance a car with a bad credit score

Learn how to finance a car with a bad credit score, and discover steps to improve your credit to secure better financing options.

Written by Hayley Bevan and Victoria Smith

Published: 22/12/25Published on December 22nd, 2025

Last reviewed: 22/12/25Last reviewed on December 22nd, 2025

5 mins read

Financing can help to spread the costs when budgeting for a new car. But if you have bad credit, you might find it more challenging to get an agreement over the line.

As with other types of loans, car finance starts with a credit check to determine your likelihood of making payments on time. Based on your credit health, an application could get rejected or accepted under stricter terms.

But even if you have bad credit, there are other ways to potentially secure car finance. In this guide, we’ll share what’s possible and offer actionable tips to get your credit back on track.

Can you get a car on finance with bad credit?

It is possible to get a car on finance with bad credit, but it might come with limitations. As well as the prospect of shorter loan terms and higher interest rates (APR), lenders might also request a larger deposit or a guarantor with good credit to co-sign the loan.

If you’re reluctant to accept a finance offer provided by a dealership, you have the option to shop around for a better deal. As part of your search, you could consider a specialist lender, broker service, or subprime car finance provider.

With whichever option you choose, it’s important to carefully read and compare the terms and conditions, and to check the legitimacy of each lender. That way, you’re in a stronger position to avoid predatory lending practices.

If financing a car doesn’t feel right, you could also explore the idea of saving up to pay for it all in one go. It might mean you have to wait a little longer, but it could save you the expense of paying interest.

What credit score do you need to buy a car?

There isn’t a specific credit score to guarantee approval for car finance. Where some lenders might accept your application based off a low score, others may have stricter requirements.

To calculate your score, credit reference agencies will focus on specific areas on your credit report, including payment history, current amount of debt, and length of credit history.

Credit score ranges will depend on your chosen credit reference agency. With Experian, you’ll receive a score based on a scale of 0–999 which falls in the following average ranges:

· Good credit score (700+)

· Fair credit score (600-699)

· Bad credit score (Below 600)

Although there’s no universal minimum score for car finance in the UK, most lenders typically prefer a score sitting in the fair or good credit score range.

Even if you’re accepted for car finance with a bad credit score, you might be subject to shorter loan terms, higher interest rates (APR), or a larger holding deposit.

For that reason, it’s a smart idea to improve your credit score wherever possible. Not simply to strengthen your chances of securing car finance, but to open doors for other financial products.

How to get car on finance with bad credit: 6 effective tips

Having bad credit doesn’t necessarily mean you can’t secure a car on finance. Although it might feel like your options are limited, there are actions you can take to get things moving.

Here’s a step-by-step guide to improve your chances of being accepted (and potentially land a better deal).

Save for a bigger deposit
By saving for a more significant deposit (e.g. 10–20%), you can reduce the requested loan amount and improve your chances of being accepted.

Consider a guarantor
A guarantor reduces risk to lenders by legally promising to cover your debt and financial obligations in the event of a missed car payment.

Research specialist bad credit lenders
If you can’t secure car finance through a dealership, specialist bad credit lenders or brokers may offer a subprime loan.

Check eligibility before applying
Taking the time to check your eligibility through a soft search tool will help to avoid hard credit searches that may harm your credit score.

Improve your debt-to-income ratio
By reducing debt before you apply for car finance, you’ll demonstrate to lenders you’re in a stronger financial position. We’ll share some practical ways this is possible in the next section.

Shop around
Even if you’re accepted for car finance at a dealership, it’s always best to shop around for alternative lending options that might offer a better deal. As part of your search, always check the terms to avoid the prospect of predatory lenders.

With whichever route you explore, it’s important your financial decisions work for you in the long run. As tempting as it might be to secure a new set of wheels, it shouldn’t come at the cost of leaving you financially exposed.

How to fix bad credit to buy a car

Whether it’s financing a car, securing a loan, or applying for a mortgage on your next property, building your credit score is always a smart move.

Not only will it demonstrate to lenders a level of control with your finances, but it can also help to save money through preferential interest rates and lower deposit amounts.

As a starting point, here are some actionable ways on how to fix a bad credit score and begin to open doors for other financial possibilities:

Check your credit report
Identifying and reporting errors on your credit report can help to improve your credit score and chances of securing car finance.

Settle debts and clear defaults
Paying off debt wherever possible not only protects your score, but demonstrates to lenders you’re committed to making payments on time.

Register on the electoral roll
Personal details (e.g. name and address) shared in an electoral roll are recorded on your credit report which can improve your credit score.

Avoid multiple credit applications
By limiting credit applications and hard searches recorded on your report, you’re in a better position to protect your score.

Although it might be more challenging to secure car finance with bad credit, it isn’t impossible. By researching your options and taking the time to gradually improve your credit score, you can strengthen your chances of being accepted.

Even if you don’t need car finance right now, it’s a smart move to improve and maintain a healthy credit score. With an Aqua credit card, you get access to expert support and financial tools to help you on your way.

To get started, take our free eligibility check with no impact on your credit score.

Representative 39.9% APR (variable) on Aqua Classic

Contributors

Hayley Bevan

Hayley is an editor at Aqua.

Victoria Smith

Victoria is an editor at Aqua.