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I would like to borrow
£60
To pay back over
3.5 years

Zuto is a credit broker, not a lender. Our rates start from 9.4% APR. The rate you are offered will depend on your individual circumstances. Representative Example: Borrowing £8,000 over 60 months with a representative APR of 19.9% the amount payable would be £204 a month, with a total cost of credit of £4,264 and a total amount payable of £12,264.

Zuto Limited. Registered in England under number 05722976. Registered office: Winterton House, Winterton Way, Macclesfield, Cheshire SK11 0LP. Zuto Limited is acting as a broker and not as a lender. Authorised and regulated by the Financial Conduct Authority, registration number 452589. Zuto can introduce you to a limited number of finance providers, based on your credit rating, Zuto won't charge you anything for this service, but do get a fee from the lender which varies based on the product or amount borrowed.

What to do if you're refused car finance?

If you apply for a car loan and are turned down, depending on the circumstances, there are a number of steps to take. If you’re currently considering what to do if you’re refused car finance, then read on for some helpful suggestions of potential actions you can opt for.

Investigate why you’ve been refused car finance

With multiple reasons possible for why your application for finance might’ve been declined, it’s worth working out why. Something as simple as an error on your part when filling in the application can result in a rejection. If you feel you’ve got a healthy credit score and there’s no reason for you to be declined, it’s worth double checking your paperwork and ensuring you haven’t made any mistakes.

Contact the finance company

Most finance brokers and lenders will offer you the opportunity to contact them and find out why you’ve been declined for car finance if you’re not able to work out why you’ve been rejected. Sometimes when you use a finance broker who has access to a panel of lenders, they’re unable to match your credit record and situation to any of the finance companies they deal with.

Checking your own credit report

It’s a good idea when investigating why you weren’t accepted for a car finance agreement to examine your credit profile. Companies supplying this service like ClearScore and Experian allow you to see how you look to lenders, which can help identify anything on your record that might be negatively affecting them offering you credit.

The impact of your credit rating

If you haven’t used credit before, you might suffer from a limited credit profile with no history for lenders to look up, so they might decline to offer you finance. Similarly, if you’ve had payment issues in the past and have a bad credit rating, this will also make finance companies think twice about offering you a car loan.

If you’ve been turned down for car finance under these circumstances, it might be worth trying to get a guarantor the next time you apply.

Advantages of a guarantor

A person who is willing to fulfil your payments if you find you’re not able to during the time of your car finance is known as a guarantor. With a guarantor nominated on your car finance application, a lender will feel more confident when it comes to offering you an agreement.

Make sure you obtain the full consent of your chosen guarantor before making your finance applications as it’ll be their credit rating being checked prior to any credit being offered.

Stop applying

Don’t stop applying for car finance completely, but once you’ve recognised there is a problem with your credit history, it might be a good time to stop making any more applications until you’re in a better position.

Multiple failed attempts will negatively impact your credit score, making your attempts to secure finance increasingly difficult.

Rebuild your credit score

If your credit history is to blame, don’t worry as it can be rebuilt. Ensure your name is on the electoral role and that your address is up to date on any credit you currently possess. Set up direct debits for your utility bills to show responsible paying and consider a rebuilder credit card, especially designed to show lenders you can manage repayments.

If possible, pay off any existing debts and if you’ve got a default on your record contact the lender and arrange a repayment schedule. You can also add a 200-word statement explaining your situation that lenders can read to better understand your situation.

Check your credit score six to 12 months after following these steps and ensure it’s in good shape before applying again.

Other related FAQs

Looking for more related content to this? We’ve picked a selection of related topics that you may find helpful

There is no specific minimum credit score needed to finance a car. While your credit score is one factor – lenders will consider a number of different pieces of information; including affordability and the type of vehicle you’re buying.

Find out more

If you apply for car finance shortly before applying for a mortgage, this can affect your mortgage price. However, if you have a mortgage in place already, it will have no impact.

Find out more

It is not possible to get car finance in the 12 months after being declared bankrupt or until your bankruptcy is discharged through the courts. Getting finance without declaring that your bankrupt is against the law – and could lead to an extension of your bankruptcy.

Find out more

It may be possible to get car finance if you have an Individual Voluntary Arrangement (IVA) currently in place. To do so, you’ll need to seek the permission of the Insolvency Practitioner dealing with your case.

Find out more

Your access to agreements may be more limited, but it is possible to get car finance with a poor credit history.

Find out more

If you make numerous applications for car finance, repeated credit checks can impact your score negatively. Your approach to paying back the loan will decide longer-term credit score effects – but if you pay on time, it could well go up.

Find out more

In the short term, applying for a car loan can lower your credit score. However, over time if you make your repayments ontime, it can help you to build your score.

Find out more

The best way to get car finance with a poor credit rating is to take steps to rebuild your credit history, such as ensuring you’re on the electoral register, making payments on time and using ‘rebuilder’ credit cards.

Find out more

It is possible to get car finance with a default, but it may be more difficult to do so than if you had a good to excellent credit score.

Find out more

Both Equifax and Experian are credit referencing agencies. They use slightly different scales to present your credit rating – but both can provide lenders with some of the information they need to decide whether they’re willing to provide you with car finance.

Find out more
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