If you are looking to fund the purchase of a new or used car, but have a poor credit rating, you may think finance is not an option. But even if you have a bad credit, you can still find a finance package, and some are specially tailored for those in your circumstances. So what finance product is best for those with bad credit? At Creditplus, we are experts in finding the perfect finance product tailored to you. So here is our pick for the best finance product for bad credit.

Which product is best for me?

If you have a bad credit rating, some of the more popular finance products such as Personal Contract Purchase (PCP) are only available to those with a very good credit rating. While you might be disappointed to miss out on this type of product, there are still some products available to you. When you apply for finance with Creditplus, we will find the right product based on your individual circumstances.

From our experience, one of the best finance products for bad credit is hire purchase. This product is open to a wider variety of credit ratings, including those with bad credit.

How does hire purchase work?

Hire Purchase works by spreading the entire cost of the finance agreement across the monthly terms – both the amount of money borrowed and the interest rates. By breaking it down into manageable monthly payments, you can spread the cost of your deal and you’ll also know exactly how much you will need to pay each month. If you are balancing a budget or trying to repair your credit rating, having that knowledge of what you need to afford can help you as you sort your finances out.

You should be aware though that Hire Purchase products generally use a fixed rate of interest. This will be calculated based on your credit rating at the start of the agreement. So if you have a particularly poor credit rating, you might end up paying a higher rate of interest.

What can you do to get a better deal?

If you have a bad credit rating, you should be taking steps to try and improve your situation. The good news there are lots of steps to take. Some are simple, such as signing up for the electoral role and ensuring your traceability. Others are more complicated. In any case, you should use one of the free credit check websites to get your current score and have a look at what is having a negative effect.

Managing your credit can be difficult, so if you have any concerns, Creditplus recommend getting in touch with a debt advice charity. They can provide free impartial advice that will help you get back on track.

Another thing you can do is to have a large deposit. The more money you pay up front, the smaller amount you need to borrow. This in turn means you are paying less interest across the length of your finance agreement. So if you can save up for a deposit, you will end up paying less for your car finance package, reducing the monthly payments a great deal.

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