Bad Credit Explained

Moneybarn is a specialist lender, working with customers who have a poor credit history to help them finance the vehicle they need. But what does ‘Bad Credit’ mean? How can it affect you? And what can you do to improve your credit score? We’ll try to explain…

Why do I have bad credit?

There are many different things which can cause your credit score to go down, but generally it will be because of a failure to stick to the terms of a credit agreement. For example, if you miss a payment to your lender, this can cause your credit score to go down, and this means you may be viewed as having ‘bad credit’.

How does bad credit affect me when I need to borrow money?

Whenever you want to borrow money from a lender, they will run checks on your credit score to see if they will lend to you. They’ll base their decision on your credit score and their own rules on who they can lend to.

A ‘standard’ lender, such as a high-street bank, will often not lend to customers who they view as having bad credit.

You may still need to borrow money to afford a car, van or motorbike to continue your day-to-day life, particularly if you’re self-employed or you commute to work.

How can I improve my credit score?

You can improve your credit score by paying off your outstanding finance and/or by continuing to borrow money and making repayments on time, but this can take a while.

There are also other ways you can improve your credit score, for example by making sure you are registered on the electoral roll or by living at the same address for a long time.

Can I get car finance with bad credit?

Having bad credit doesn’t mean you can’t borrow money to buy the vehicle you need, but it may mean that some lenders won’t approve you.

If you have bad credit, or if you’ve been rejected by other lenders in the past, you may want to look at a specialist lender like Moneybarn. We are the UK’s largest provider of car and van finance for people with bad credit history, so this is where we can help.

We may even be able to lend to you if you have an Individual Voluntary Agreement (IVA) or a County Court Judgement (CCJ) in place.

We are experts in helping our customers not only navigate the world of bad credit, but also giving them access to reliable vehicles, at a repayment rate that suits them.

Can a finance application harm my credit profile?

Some lenders may conduct a full credit search when you apply for finance. This means anyone who views your credit history will know you’ve applied for finance. Multiple full credit searches in a short space of time can indicate you are struggling to get approved for finance and may harm your credit profile.

If you know you have bad credit, you can avoid unnecessary credit searches appearing on your record by going directly to a lender that specialises in bad credit, including for IVAs & CCJs, such as Moneybarn.

We will carry out a credit search (with your consent), but it will only be a ‘soft search’. This means the initial search we do won’t show on your credit record, until you decide to go ahead and the documents for the agreement are generated.

If you’re looking to finance a motorcycle, van, or car but you’re worried about a poor credit rating, apply online today to see if Moneybarn can help!