If you’ve been refused car finance, it could be because of an issue with your application or bad credit. If you’ve applied multiple times and have been declined, find out why you were rejected  before reapplying.

Some car finance companies use a hard search when you apply. These hard searches can add up and affect your credit score.

Multiple hard searches on your credit file can negatively impact your credit score and may reduce your chances of being approved for future credit. These searches remain on your file for up to 12 months. 

We use a soft search when you apply for car finance, which means you can check your eligibility without leaving a visible mark on your credit file.

If the lender you have applied did a hard credit search, your credit score may drop. This is because several hard searches in a short space of time can reduce your score and your chances of getting credit.

Some lenders, including Moneybarn, do a soft search when you apply. This won’t affect your credit score. We only do a hard credit check when you’ve found the right car and contracts are drawn up.

Even with a good credit score, your car finance application could be rejected for several reasons. Lenders check your job stability and income source. If you’re self-employed, on a short-term contract or unemployed and looking for car finance, some lenders might see you as a higher risk.

Other factors include:

• Affordability: If your income doesn’t meet the lender’s criteria, or if you have other debts, car finance might not be affordable for you.
• Employment: Lenders check your job stability and income source. If you’re self-employed or on a short-term contract, some lenders might see you as a higher risk.
• Application errors: Mistakes on your application, such as incorrect addresses or typos, can lead to rejection. Double-checking your application can help prevent this.
• Lender specific criteria: Some lenders have specific rules, like only lending to certain age groups or to people with a particular type of driving licence.

Check the finance provider’s lending criteria before applying to make sure you meet their terms.

No, you can’t appeal being refused for car finance. Car finance companies can’t give financial advice, so they won’t be able to tell you the exact reason you were declined.

The most common reason for being refused is bad credit, so you could check your credit file to see if anything is affecting your eligibility.

If your car finance is approved and then declined, you could check your credit report. Something may have changed between the time you made the application and the time the lender made a hard credit search, which may have caused them to change their decision.

If mainstream lenders have refused you, you may need to use a specialist lender who can help people get car finance with bad credit.

We are proud to have over 30 years of experience helping people up and down the UK, even when mainstream lenders have refused them. Get a quote to see if we can help.