Can you get car finance with no credit history?
Written by
Joe Towner
Reviewed by
Amy LancashireYes, it's possible to get car finance with no credit history, but it can be harder and may cost more. No credit history isn't the same as bad credit. It just means lenders have little to go on, so you might be offered a higher APR.
You're not alone if your credit file is empty. Experian estimated in 2022 that around 5 million people in the UK were 'credit invisible', with little or no credit history. It's common if you're young, new to the UK or have always paid for things in cash or by debit card.
Is no credit history the same as bad credit?
No. Bad credit means your credit file shows problems, like missed payments, defaults or a County Court Judgment (CCJ). Having no credit history, or a thin credit file, means there's little or nothing on your file. Lenders can't see any warning signs, but they can't see a track record of repaying either.
Why do lenders need to see a credit history?
Before lending, a car finance company must assess your creditworthiness, including whether you can afford the repayments. Your credit file, held by credit reference agencies (Experian, Equifax and TransUnion), is one of the main ways it does this. With little history to look at, a lender may lean more on other information, such as your income and regular outgoings.
How can I build a credit history?
Register to vote at your address. Being on the electoral roll helps lenders confirm who you are and where you live.
Check your credit file. You can check your file with each of the 3 main credit reference agencies for free. Make sure your details are right.
Check your eligibility before applying. Some lenders and brokers offer eligibility checks that use a soft credit check, which doesn't affect your credit score. Lots of full applications in a short time can make lenders more cautious.
Borrow less. A bigger deposit or a cheaper car means a smaller amount to lend, which is less risk for the lender.
Ask someone to be your guarantor. A guarantor agrees to make your repayments if you can't. Not every lender offers this, and the lender still has to be satisfied you can afford the repayments yourself.
Share your bank data. Some lenders can use open banking to see your income and spending, which gives them more to go on than an empty credit file.
Should I build my credit history first?
If you don't need a car straight away, you could consider delaying the purchase and building a credit history first. Paying on time, every time, on even one or two accounts builds a track record lenders can see. Common ways to start include a mobile phone contract or a credit card that you pay off in full each month. Our guide on how to increase your credit score has more information.
What should I watch out for?
Be wary of offers that promise 'no credit check' or 'guaranteed approval'. Under FCA rules on credit promotions, lenders and brokers mustn't suggest credit is available whatever your circumstances, and lenders must check you can afford to repay, so these claims can be misleading. It's also worth comparing the total amount repayable, not just the monthly payment. A longer term or a higher APR can make a low monthly payment cost much more overall.
Car finance with no credit history FAQs
Can I get car finance if I've just moved to the UK?
It's possible, but a credit history from another country doesn't usually carry over, so you're likely to start with no UK history. Some lenders also ask how long you've lived in the UK and for proof of address.
Can I get car finance with no credit history and no deposit?
Some lenders offer no-deposit car finance, but it's less widely available, and you'd be borrowing the car's full price. Even a small deposit reduces how much you need to borrow.
Can I use my parent's credit history?
No. Your credit history is your own. It's only linked to someone else's if you have joint finances with them, such as a joint account. A parent would be able to act as a guarantor.
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
