How to get car financing with no credit check
For some people, having a car is essential. You’re probably already aware that cars are not cheap and the most common way to get one is through car financing or getting a loan. Getting a loan usually requires passing credit checks or affordability checks. Does this mean that car financing is only available to people with a high credit score? Is it possible to get car financing with no credit check? Learn more here!
Is it Possible to Get a Car Loan with No Credit Check?
No, it is not realistically possible to get a car loan from a legitimate lender without some form of credit check or affordability check. Car financing firms or other lenders will need to check your credit file before they approve a car loan but this doesn’t mean you won’t be able to get a car. The fact is that there may still be options for financing a car if you have poor credit.
A Google search for ‘no credit check car loans’ will certainly yield plenty of options but make sure to do your research including reading customer reviews when evaluating providers. One option for getting a car loan with bad credit is to use a credit broker service to connect you with the right lenders. These services perform a ‘soft credit check’ to look at your current income, outgoings, and existing credit with the intent of finding the right lenders for your financial situation. A soft credit check does not negatively impact your credit score.
Read: How to Get Accepted For a Loan in the UK
Why Do Lenders Run a Credit Check for Car Loans?
To get a car loan in the UK, you need to pass background and affordability checks. A bad credit history will likely affect your car financing application. Agreeing to a credit check actually helps you by making sure that you are offered the correct interest rates for your circumstances, rather than over-paying.
What Credit Score do You Need to Get Car Finance?
There is no minimum credit score you need to apply for car financing, each lender is different. However, you are likely to get better rates with a higher credit score. Your credit score is an assessment of how risky you are to lend to.
Here are some factors to think about when applying for car financing:
- Age: Applicants must be 18 or over
- UK residency : You’ll need a permanent UK address and will need to prove you live there
- Proof of employment and income: Be ready to prove where you work and how much you earn.
- UK bank account
- Affordability, credit and fraud checks: Each lender has different checks they run to make sure you are who you say you are and that you’ll be able to pay them back any money you borrow.
- Your credit report: Your credit score is an assessment of how risky you are to lend to. A higher credit score will result in lower interest rates on a car loan.
- Current income: Some lenders will look at your income as part of your credit assessment.
Resources for Repairing Credit to Get Car Financing:
- Credit Builder Cards Explained: credit builder cards offer another way of building credit for those who have bad or no credit
- How to Repair Credit in the UK: a guide to begin the process of repairing your credit score
- 8 Ways to Build Your Credit Score You Didn’t Know About: dig into some of the more unconventional ways to give your credit score a lift
Should I Trust Lenders Offering No Credit Check Car Finance?
No. Lenders who actually do not include a credit check in their preliminary processes are exactly what they sound like: a fantasy. A helpful tip to remember: if it sounds too good to be true, it probably is. A formal credit check and contract provides a level of safety both for you and the lender. You’re likely to be overpaying or dealing with a lender that is not trustworthy or certified if they don’t require a credit check. In fact, all regulated lenders run credit and affordability checks to uphold their commitment to responsible lending. If you’re unsure whether a lender is legit or not, you can use the Financial Services Register to check and do research.
How do I Build My Credit Score to Get Better Car Financing?
Building your credit file properly is the best long term solution to finding better car financing deals. In fact, an ‘excellent’ credit score could save you tens of thousands £s over a lifetime. Pave is helping the hardest workers build credit the right way. We do this by offering the proper path to good credit.
Learn more about how we’re helping our community build healthy credit through partnerships with all of the major Credit Reference Agencies in the UK: Experian, Equifax and TransUnion.