Car Leasing With Bad Credit
Had a bit of a wobbly credit past? Don’t panic! You might still be able to get a shiny new car.
Check out my super helpful guide below. It explains how vehicle finance works, what happens if your credit isn’t perfect, and what things can affect your chances of getting approved for a lease. Spoiler: bad credit doesn’t always mean bad luck!
What Is Vehicle Finance?
When you go for a car lease, you’ll need vehicle finance. That’s just a fancy way of saying the finance company wants to check you can actually pay for the car! They’ll take a peek at your credit history to see how reliable you are when it comes to paying bills and other stuff.
A credit check looks at your current finances, your credit strength, and how much of a risk you are. Basically, they want to know if you’re good for the money before handing over a shiny new car.
It usually takes up to 72 hours for the credit check to come back with a “yes”, “no”, or sometimes a “maybe, please send more proof”. If they ask for extra bits of info, it can take a bit longer. But don’t worry — we’ll keep you updated all the way!
What If I Have Bad Credit History?
So your credit history isn’t perfect? Don’t worry, you’re not alone! To check your eligibility for a car lease, finance companies will take a peek at your credit file using one (or more) of the big three UK credit agencies: Equifax, Experian, or TransUnion.
Each one has its own weird little scoring system, so there’s no magic number that guarantees a pass. They usually rate your score somewhere between “very poor” and “excellent”.
Most funders like to see a “good” to “excellent” score before saying yes, but don’t panic if yours isn’t there yet. Funders look at more than just the score. They consider your overall situation and how reliable you seem when it comes to paying on time.
So, What Red Flags Do Funders Look For?
Finance companies go through your application looking for anything that seems a bit off. These are the things that can make them nervous — little “red flags” that shout “risky!”
Here are some examples of what might worry them:
✅ Missed or late payments
✅ Defaults or CCJs
✅ Very high levels of existing debt
✅ Recent credit applications everywhere
✅ No credit history at all
Don’t let that list scare you though! Everyone’s situation is different, and some funders are more flexible than others.
Responsible Lending
You will need to ensure the value of the rental you are applying for is affordable; you should be looking at how much money you have coming into your account and comparing it with your outgoing payments (like credit cards, mortgages, loans and childcare costs) to determine your disposable income. You will need to leave yourself with enough income to cover your outgoings and still have a disposable income that covers your rental comfortably.
Missing Payments
Overdue payments can indicate that you are struggling to keep up with and manage your finances. Missing payments can remain on your credit check for up to six years; lowering your credit score. Some finance companies also take note of any payment holidays taken during the Covid period as these can sometimes be noted as missing or overdue payments. Always double-check before applying for finance.
Any Bankruptcies or Insolvencies
If you have had to apply for bankruptcy or have had a County Court Judgement issued against you, you probably have had marks noted down on your credit record that be harmful to your credit score. Funders will take note of any bankruptcies, insolvencies or CCJs on your credit check.
Too Many Credit Searches
Applying for credit leaves behind an impression on your history and if you have a lot of searches across a short period of time, it can indicate that you are desperate for credit or are finding it difficult to pay your bills.
Credit Limit
Reaching your credit limit by either using your entire overdraft or maxing out your credit can lead to finance companies believing you are in financial difficulty. They also determine that you have difficulty if you have multiple loans, inconsistent repayment history or any unpaid debts.
Car Leasing With Bad Credit
Get in touch with Lily at [email protected] and we will be able to help you determine whether you have a good chance at leasing your next car. If you think you will have any problems with credit, we can also help you explore different options so we can get you behind the wheel of a brand-new car.
