Yes, you can apply for car finance with a default. However, having a credit default will show on your file and could impact your score, including if it is an unpaid default.
If you have a default, it means that you’ve missed (or defaulted on) payments in the past. You will know if you have a default as you will have received a notice of default. That will have been added to your credit file.
A default can impact your credit score and make it harder to get car finance. Lenders might see you as riskier to lend money to because you have missed payments before. Thankfully there are a number of things you can do to improve your credit score if you have a default.
Adding a ‘Notice of Correction’ to your credit file may help your chances of approval. This is a statement of 200 words where you can give an explanation as to why the default happened. Lenders can use this to understand your circumstances when reviewing your finance application.
You should also try to settle any outstanding debt with your lender. Try to arrange a payment plan to pay off any default balances you have. By doing this, you could increase your chances of being approved for car finance.
A default typically stays on your credit file for six years from the date of default, even if you pay off the debt. Your credit score could be affected by having a default, so you might find it harder to find a lender who will accept you, but don’t worry.
That’s where a specialist lender like Moneybarn could help you. We specialise in helping those with bad credit get car loans, as we understand you need a reliable car to get around. Even if you’ve had a default or CCJ.
Everyone’s eligibility for car finance is different. If you’re looking for a car loan and have an unpaid default then you are welcome to apply today. Our online application form is quick and easy to complete and will tell you whether we can offer you finance.
It’s important to know that we don’t offer car finance to those currently bankrupt.