Car finance with defaults is not always impossible. A default on your credit file does not always mean you will be refused.
Some lenders may still look at applications with defaults. They often look at affordability and your situation now.
This page explains car finance with defaults and the steps you go through when you apply for car finance.
Defaults are often part of what lenders call bad credit. That is why many people search for car finance for bad credit when they have missed payments or defaults.
Bad credit is not the same for every lender. Some lenders focus on the default. Others focus more on affordability and recent payment history.
If you have been turned down before, you are not alone. A decline does not always mean every lender will say no.
Step 1: Calculate your monthly repayments
Step 2: Apply and track your application online, in real time (No login or app needed!)
Representative example – Total amount of credit £10,500, annual interest rate 18.25% (fixed), charge for credit £9,886.25 (£9,581.25 interest, £295 admin fee and £10 option to purchase fee), total amount payable £20,386.25. Loan term of 60 monthly instalments, 59 payments of £339.60 and 1 final instalment of £349.60. 34.5% Representative APR – Subject to status and affordability.
A credit default is usually added after a debt has fallen behind for a period of time. It shows the lender believes the agreement was not kept to.
Defaults may relate to:
A default often stays on a credit file for up to six years. This is usually the case even if the balance is later paid. Many people check the time left by looking at how long bad credit stays on your file.
A default may show as settled, partially settled, or outstanding. Lenders may treat these differently. There is no single rule.
If a default relates to an existing agreement with Go Car Credit, a notice of default may be part of the formal process when payments fall behind.
Some lenders may still review applications with defaults. A default does not always lead to an automatic refusal.
Lenders often look at the full picture. They may consider:
Different lenders use different checks. That is why outcomes can vary.
When defaults sit alongside other credit issues, lenders may look at the pattern as a whole. This is often described as bad credit car finance.
Some lenders use automated checks. If you do not meet certain rules, an application may be declined quickly.
Declines can also happen for practical reasons. For example, the agreement may not look affordable. Or details on the application may not match the credit file.
Some people also worry about the type of check used. The difference between hard and soft credit checks is often part of that concern.
If you have already been refused car finance, it may help to slow down and check affordability first. It may also help to keep your details consistent across forms.
Go Car Credit is a direct lender. This means we look at your application ourselves. A direct lender is not the same as a broker.
When you apply, we check the details you give us. We also check that the finance looks affordable for you.
We use lending checks to decide whether we may be able to offer finance. The result depends on your details. There is no obligation to go ahead.
This depends on the lender and the full details of the application.
In some cases, lenders may be more open to defaults that are:
Defaults linked to fraud or serious misuse are less likely to be accepted.
Some people with defaults also have a CCJ or an IVA. Lenders may consider how these sit alongside affordability and recent payment history.
Settling a default does not remove it from your credit file straight away.
Some lenders may prefer settled debts. Others may focus more on recent payment behaviour. There is no guarantee either way.
If you choose to settle a default, it may help to make sure you can still cover your essential bills and living costs.
Credit reference agencies collect credit information. They share it with lenders.
They do not approve car finance. They do not refuse car finance.
The lender makes the decision. The lender decides how to use the information on your credit file.
A default often stays on your credit file for around six years.
MoneyHelper says a credit report is a record of facts. These facts can include your payment history and balances.
MoneyHelper explains how credit reports work and why lenders use them. They cover this in How to check your credit report for free.
The FCA Financial Lives Survey says 2.9 million UK adults missed a payment on a regulated credit agreement in the six months to May 2024. The FCA lists this in the Financial Lives Survey 2024 key findings.
You can start an application with apply for car finance.
We ask for a few details so we can check what you may be able to afford.
Sending the form does not mean you are accepted. It also does not mean you have to go ahead.
Car finance is not right for everyone. This is often because the payments would be too high or income is not stable. Why bad credit finance is not suitable for all explains common reasons in plain language.
Some lenders may still consider applications with defaults. It often depends on affordability, recent payment history, and how long ago the default happened.
A default often stays on a credit file for up to six years from the date it was recorded.
Settling a default does not remove it straight away. Some lenders may prefer settled debts. Others may focus more on recent payment behaviour.
This depends on the checks used. Many people want to understand the difference between hard and soft credit checks before they apply.
No. All applications are subject to checks, affordability, and lending criteria.
Simple steps may help, such as checking affordability, avoiding lots of applications close together, and keeping your details consistent. These are common themes in top 10 bad credit tips.
If you have defaults on your credit file and are considering car finance, applying may help show whether any options are available based on your situation today.
