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Car finance ›
What credit score do you need for car finance in the UK?
Daniel Timblick, Senior Credit Risk Analyst, Wednesday, 12 April 2023
Updated: Friday, 5 April 2024
Updated: Friday, 5 April 2024
When you apply for car finance in the UK, lenders consider a range of factors. Each has different lending criteria and eligibility requirements. However, they will all review your credit history, income, and affordability to decide whether to offer you finance.
While getting car finance with bad credit may be difficult, it’s not impossible. In this guide, we explain why no minimum credit score is needed to get car finance.
In this guide
- What is a credit score?
- How does my credit score affect car finance?
- Is there a minimum credit score required for car finance?
- What are the different ways of buying a car?
- What is a good credit score to finance a car?
- What else do lenders consider apart from your credit score?
- Getting car finance with a low credit score
What is a credit score?
Your credit score is a three-digit rating given to you based on your financial history. It indicates how reliable you are at borrowing and repaying money.
A higher credit score suggests that you have been responsible for credit in the past, which may make it easier to get approved for credit in the future. On the other hand, a fair or poor credit score can mean you’ve missed payments in the past or had a CCJ or IVA.
Learn more about credit scores with help from our guide: what is a credit score?
How does my credit score affect car finance?
When applying for car finance, your credit score can affect the following:
- Which types of car finance and vehicle models are available to you
- Whether or not you will be approved for car finance
- Your interest rate
Having a bad credit score doesn’t stop you from getting car finance, and having a good credit score doesn’t guarantee car finance.
This is because lenders use a range of information to understand if car finance is suitable for you. While they may use your credit score to get an understanding of whether you have good or bad credit, they also review your credit history and affordability before deciding.
Is there a minimum credit score required for car finance?
When you apply for car finance in the UK, lenders consider a range of factors. Each has different lending criteria and eligibility requirements. However, they will all review your credit history, income, and affordability to decide whether to offer you finance.
While getting car finance with bad credit may be difficult, it’s not impossible. In this guide, we explain why no minimum credit score is needed to get car finance.
In this guide
- What is a credit score?
- How does my credit score affect car finance?
- Is there a minimum credit score required for car finance?
- What are the different ways of buying a car?
- What is a good credit score to finance a car?
- What else do lenders consider apart from your credit score?
- Getting car finance with a low credit score
What is a credit score?
Your credit score is a three-digit rating given to you based on your financial history. It indicates how reliable you are at borrowing and repaying money.
A higher credit score suggests that you have been responsible for credit in the past, which may make it easier to get approved for credit in the future. On the other hand, a fair or poor credit score can mean you’ve missed payments in the past or had a CCJ or IVA.
Learn more about credit scores with help from our guide: what is a credit score?
How does my credit score affect car finance?
When applying for car finance, your credit score can affect the following:
- Which types of car finance and vehicle models are available to you
- Whether or not you will be approved for car finance
- Your interest rate
Having a bad credit score doesn’t stop you from getting car finance, and having a good credit score doesn’t guarantee car finance.
This is because lenders use a range of information to understand if car finance is suitable for you. While they may use your credit score to get an understanding of whether you have good or bad credit, they also review your credit history and affordability before deciding.
Is there a minimum credit score required for car finance?
There is no minimum credit score for car finance
There is no minimum credit score required for car finance in the UK. Different lenders use different Credit Reference Agencies to access your credit file. Someone’s credit score will be different across CRAs as their scoring ranges are unique, so there isn’t one particular score that lenders require to approve you for car finance.
In other words, there is no universal credit score that you need to access car finance.
A higher credit score indicates you have managed credit responsibly in the past. This could mean lenders are more willing to offer you car finance at a lower interest rate.
To improve your credit score and increase your chances of getting car finance, you could:
- Make your regular payments on time and in full
- Register for the electoral roll at your current address if you haven’t already
- Check your credit report and notify the Credit Reference Agency if you find any mistakes or out-of-date information
- Add your name to any joint bills so that they will show on your credit report, providing proof that you are good at keeping up with repayments
- Avoid making lots of applications for finance, as they may use a hard credit check
What are the different ways of buying a car?
There are several ways to buy your next car, other than using cash to pay for it upfront. Let’s explore them in more detail so you can decide which is best for you.
There is no minimum credit score required for car finance in the UK. Different lenders use different Credit Reference Agencies to access your credit file. Someone’s credit score will be different across CRAs as their scoring ranges are unique, so there isn’t one particular score that lenders require to approve you for car finance.
In other words, there is no universal credit score that you need to access car finance.
A higher credit score indicates you have managed credit responsibly in the past. This could mean lenders are more willing to offer you car finance at a lower interest rate.
To improve your credit score and increase your chances of getting car finance, you could:
- Make your regular payments on time and in full
- Register for the electoral roll at your current address if you haven’t already
- Check your credit report and notify the Credit Reference Agency if you find any mistakes or out-of-date information
- Add your name to any joint bills so that they will show on your credit report, providing proof that you are good at keeping up with repayments
- Avoid making lots of applications for finance, as they may use a hard credit check
What are the different ways of buying a car?
There are several ways to buy your next car, other than using cash to pay for it upfront. Let’s explore them in more detail so you can decide which is best for you.
Conditional Sale (CS)
Conditional Sale is the type of finance agreement that we offer at Moneybarn.
CS finance is where we pay the dealership for you, and you will legally own the vehicle once you’ve made the final payment. There is no additional fee or payment needed to legally own the car at the end.
Hire Purchase (HP)
A Hire Purchase agreement is similar to a Conditional Sale. You might need to pay a deposit upfront, and then make monthly payments (usually for between 12 and 60 months).
You won’t legally own the car until you make the ‘option to purchase’ fee at the end of the agreement.
Personal Contract Purchase (PCP)
With Personal Contract Purchase agreements, you usually pay an initial deposit, followed by monthly payments. PCP gives you more flexibility if you aren’t sure whether you want to keep or sell the vehicle.
This is because you can either return the car at the end of the agreement, trade it in and start a new PCP deal, or pay the balloon payment and become the car’s legal owner.
Personal Contract Hire (PCH)
Personal Contract Hire is also known as car leasing. You won’t ever legally own the car and will return it to the dealer or leasing company at the end of the rental term.
Wondering whether car finance or a lease agreement is right for you? Read our full guide on if it’s best to buy or lease your next car for more information.
Personal loan
A personal loan is a lump sum of money that you can borrow from a bank or finance provider and use to buy a car. You can then choose to purchase the vehicle from a dealership or a private seller. The lump sum is repaid in monthly instalments.
Take a look at our guide, which explains the differences between a personal loan and car finance.
Conditional Sale (CS)
Conditional Sale is the type of finance agreement that we offer at Moneybarn.
CS finance is where we pay the dealership for you, and you will legally own the vehicle once you’ve made the final payment. There is no additional fee or payment needed to legally own the car at the end.
Hire Purchase (HP)
A Hire Purchase agreement is similar to a Conditional Sale. You might need to pay a deposit upfront, and then make monthly payments (usually for between 12 and 60 months).
You won’t legally own the car until you make the ‘option to purchase’ fee at the end of the agreement.
Personal Contract Purchase (PCP)
With Personal Contract Purchase agreements, you usually pay an initial deposit, followed by monthly payments. PCP gives you more flexibility if you aren’t sure whether you want to keep or sell the vehicle.
This is because you can either return the car at the end of the agreement, trade it in and start a new PCP deal, or pay the balloon payment and become the car’s legal owner.
Personal Contract Hire (PCH)
Personal Contract Hire is also known as car leasing. You won’t ever legally own the car and will return it to the dealer or leasing company at the end of the rental term.
Wondering whether car finance or a lease agreement is right for you? Read our full guide on if it’s best to buy or lease your next car for more information.
Personal loan
A personal loan is a lump sum of money that you can borrow from a bank or finance provider and use to buy a car. You can then choose to purchase the vehicle from a dealership or a private seller. The lump sum is repaid in monthly instalments.
Take a look at our guide, which explains the differences between a personal loan and car finance.
What is a good credit score to finance a car?
There is no definitive answer to the question of what a good credit score is to finance a car, as the three main Credit Reference Agencies (CRAs) have their own ranges and calculations for credit scores.
Each CRA groups scores together in bands so lenders can get an idea of the risk level of each customer.
Experian scores for ‘good’ and ‘excellent’ are as follows:
- Good: 881-960
- Excellent: 961-999
Equifax ranges are quite different, with the addition of the ‘very good’ bracket:
- Good: 531-670
- Very Good: 671-810
- Excellent: 811-1000
TransUnion scores are different again:
- Good: 604-627
- Excellent: 628-710
You can check your credit report to make sure all of the information is correct. If anything is out of date or wrong, contact the Credit Reference Agency to get it resolved. Errors in your credit report could mean delays or refusals of your car finance application.
What is a good credit score to finance a car?
There is no definitive answer to the question of what a good credit score is to finance a car, as the three main Credit Reference Agencies (CRAs) have their own ranges and calculations for credit scores.
Each CRA groups scores together in bands so lenders can get an idea of the risk level of each customer.
Experian scores for ‘good’ and ‘excellent’ are as follows:
- Good: 881-960
- Excellent: 961-999
Equifax ranges are quite different, with the addition of the ‘very good’ bracket:
- Good: 531-670
- Very Good: 671-810
- Excellent: 811-1000
TransUnion scores are different again:
- Good: 604-627
- Excellent: 628-710
You can check your credit report to make sure all of the information is correct. If anything is out of date or wrong, contact the Credit Reference Agency to get it resolved. Errors in your credit report could mean delays or refusals of your car finance application.
What else do lenders consider apart from your credit score?
What else do lenders consider apart from your credit score?
Income and expenses
Lenders look at your income and expenses to make sure any finance they offer is affordable for your circumstances. Some of the checks they make might include if you have any missed payments, bounced direct debits, or gambling transactions.
These checks fall under the affordability check that lenders carry out to ensure you can afford to repay whatever you borrow.
Credit history
Your credit history is a full report of any credit you’ve had in the past, such as car finance, credit cards, and loans. It will also show lenders whether you have made your payments on time.
A credit history showing that you consistently make payments on time helps prove that you are responsible with credit, and it may increase your chances of getting approved.
Credit utilisation
Credit utilisation measures how much credit you use out of the total that is available to you. For example, if someone has £4,000 available in credit but has only used £2,000, then their credit utilisation is 50%.
Experian suggest that the ideal credit utilisation ratio is 30% or less. A high credit utilisation can indicate that you are dependent on credit, which can make you seem a higher-risk to lend to.
Address history
Lenders need to confirm your identity and address history. All lender’s criteria and processes are different. If you’ve changed addresses a lot in a short timeframe, it could be seen as a higher risk to lend to.
We require at least 3 years of UK address history to be eligible for car finance with us.
Income and expenses
Lenders look at your income and expenses to make sure any finance they offer is affordable for your circumstances. Some of the checks they make might include if you have any missed payments, bounced direct debits, or gambling transactions.
These checks fall under the affordability check that lenders carry out to ensure you can afford to repay whatever you borrow.
Credit history
Your credit history is a full report of any credit you’ve had in the past, such as car finance, credit cards, and loans. It will also show lenders whether you have made your payments on time.
A credit history showing that you consistently make payments on time helps prove that you are responsible with credit, and it may increase your chances of getting approved.
Credit utilisation
Credit utilisation measures how much credit you use out of the total that is available to you. For example, if someone has £4,000 available in credit but has only used £2,000, then their credit utilisation is 50%.
Experian suggest that the ideal credit utilisation ratio is 30% or less. A high credit utilisation can indicate that you are dependent on credit, which can make you seem a higher-risk to lend to.
Address history
Lenders need to confirm your identity and address history. All lender’s criteria and processes are different. If you’ve changed addresses a lot in a short timeframe, it could be seen as a higher risk to lend to.
We require at least 3 years of UK address history to be eligible for car finance with us.
Getting car finance with a low credit score
Lenders use credit checks to make sure any finance agreements are affordable to you. Having a low credit score or no credit history doesn’t make it impossible to get car finance. It just means you may have to use a specialist lender.
We have over 30 years of experience helping people up and down the UK, even if they have bad credit and need car finance.
Getting car finance with a low credit score
Lenders use credit checks to make sure any finance agreements are affordable to you. Having a low credit score or no credit history doesn’t make it impossible to get car finance. It just means you may have to use a specialist lender.
We have over 30 years of experience helping people up and down the UK, even if they have bad credit and need car finance.
How car finance with Moneybarn works
We help thousands of people every month, including people who have missed payments in the past or have a CCJ or IVA.
We understand that a low credit score doesn’t change the need for a reliable car to get around. That’s why we consider a range of factors, including your credit history and affordability, to help people who have been refused elsewhere.
Use our car finance calculator to see what your agreement could look like. Simply enter the amount you want to borrow, how long you want the finance to last for, and your credit score, and we’ll give you an idea of what your agreement might look like.
When you’re ready, get a quote in less than 5 minutes and get an instant decision. If you’re approved, one of our friendly experts will guide you onto a better road ahead.
Representative 30.5% APR.
We help thousands of people every month, including people who have missed payments in the past or have a CCJ or IVA.
We understand that a low credit score doesn’t change the need for a reliable car to get around. That’s why we consider a range of factors, including your credit history and affordability, to help people who have been refused elsewhere.
Use our car finance calculator to see what your agreement could look like. Simply enter the amount you want to borrow, how long you want the finance to last for, and your credit score, and we’ll give you an idea of what your agreement might look like.
When you’re ready, get a quote in less than 5 minutes and get an instant decision. If you’re approved, one of our friendly experts will guide you onto a better road ahead.
Representative 30.5% APR.
How car finance with Moneybarn works
For a better road ahead
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
