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Can I get car finance through Zuto if I have a bad credit score?

Can I get car finance through Zuto if I have a bad credit score?

So you’re thinking of changing your car. You may have your eye on something you want already, and you’ve realised that, like most people, you’re going to need car finance to pay for it.

But there’s a problem – you also know you’ve got a bad credit score and you’re worried that this will affect your chances of being accepted for finance. Does that sound like the situation you’ve found yourself in? If it does, well Zuto may be able to help. We have a panel of lenders, many of whom specialise in helping people with a poor credit score get car finance.

In any case, your credit score is only one of a number of factors that lenders use to assess whether they want to offer you finance or not. The most important thing lenders need to determine is if you can afford the monthly payments you’ll have to make towards your car finance or not.

So, to help us understand what’s affordable for you, Zuto carry out some initial affordability checks. This includes asking you to tell us details about your address, income and employment status. We’ll use this information to perform what’s called a ‘soft search’ on your credit file. This means that it shouldn’t show up when other people look at your file, only you’ll be able to see it.

We do this for two reasons (1) to ensure that you can afford to take on more credit and (2) to make sure we’re getting you the very best deal possible for your current financial situation.

If the checks we carry out show that you can afford car finance, we’ll match you with the most appropriate deal from the 80 finance options we have available from our panel of 18 lenders. This way we can try to ensure that your car finance runs smoothly from start to finish. Making things run smoothly for our customers is something we feel passionate about and it forms part of our commitment to ‘better way thinking’. You can read more about this and how it helps Zuto be the best at what we do in this blog.

Why is my credit history important?

Zuto look at your credit history to make sure that we can help you before trying to match you with a lender.

As we mentioned earlier, lenders use a number of factors to decide whether to lend to you, including your credit history. They do this because they want to know your current financial situation, so they’ll be looking at things like how much credit you’ve had in the past, how much credit you currently owe and how good you are at paying back what you owe. They can also see when you paid and how much you paid too.

They’ll use what they find to make a decision on whether they want to offer you car finance or not. So we check your history first, then our super-clever decision technology uses its expert knowledge of our lending panel to find the perfect match for your situation. We then approach that lender directly, as we know that they are already more than likely going to say yes.

This helps to stop you getting lots of ‘hard searches’ on your file, which usually happens when you’re checked by lenders directly. Hard searches are not a good idea when you already have a damaged credit score – too many in too short a time, will damage it further.

We’d just like to make something clear here too. Having a poor credit score is not always because you’ve missed payments or done anything wrong at all. In fact, you can have a poor credit score simply because you’ve never had credit in the past. This means that lenders have nothing to go off, so they don’t know how well you’ll pay any money back that they might lend you.

If you want to learn more about how your credit history affects your ability to get credit, this video from credit experts Experian will help.

The APR will be different

There is one thing you do need to keep in mind when you apply for car finance with a less-than-perfect credit score, you’ll find that the rates you’re offered are not quite as good as the rates that are offered to people with better credit scores. This is normal and will be the case wherever you choose to go for car finance.

We hope that you now realise that having a bad credit score is not always a barrier to getting car finance. And if you want to know more about how you can improve your credit score, come back next week, we'll have a whole blog on the subject. If you’re happy to start your application, hit apply at the top of this page.