Bad credit myth busting

What is a bad credit score?

Some people might think they have bad credit when in actual fact their score might be fair or even good. On the other hand, many people might assume their credit score is fine when they have actually fallen into bad credit.

Below is the general consensus of what is deemed as excellent to bad credit, defined by Experian:

  • Excellent: 961–999
  • Good: 881–960
  • Fair: 721–880
  • Poor: 561–720
  • Bad: below 560

The myths answered

Here we have taken some of the most popular myths surrounding bad credit car finance, giving you the facts instead.

Myth 1 – “A bad credit history means I can’t apply for car finance”

Although many companies won’t consider lending to people who have experienced financial difficulties, Red Potato specialise in bad credit car finance. We have a wealth of experience in helping people who have a poor credit history. You may be in a difficult situation, and having access to a car is vital to help you improve this. We will work with you to find a car, and liaise with our lender to help find suitable finance.

Myth 2 – “Past rejections for finance will put off other lenders”

Many people presume that each time a lender refuses them finance will implicate their future applications with other lenders. It’s true that some lenders will be less likely to approve your application if they see you have been refused finance in the past, however if you are in this position Red Potato will still always assist with your application.

Each time a lender views your report it does leave a mark which other lenders will be able to see, but it won’t show the outcome of whether you have been accepted or refused. Instead it will only show the date, name of the organisation and the type of finance applied for. You should be aware that if you make multiple applications for finance in a short period of time you might appear desperate for credit and therefore are more likely to be rejected.

Myth 3 – “Never borrowing means I’ll be considered a safer customer to lend to”

Lenders actually prefer you to have borrowed money in the past to show how likely you are to pay back future debts. It can often be just as restrictive having no credit history than it is to have a bad credit history. In order to get the best rates from lenders it’s a good idea to build your credit score up over time. We also have some useful information on how you can improve your credit score.

Myth 4 – “I’m in an IVA/Trust Deed so won’t be considered for finance”

Although some lenders won’t allow you to borrow from them, Red Potato has arranged finance for many customers who are in an IVA or Trust Deed. Here you can find out more information about car loans in a debt plan.

Myth 5 – “I’m self-employed so won’t be approved for finance”

We can source self-employed car finance, even for those who have a history of bad credit. You will just need to provide bank statements from the last 6 months and your most recent tax return.

Myth 6 – “I was previously made bankrupt so I can’t apply for finance”

If you have previously been declared bankrupt, but have since been discharged, we will still assist with your application for bad credit car finance.

This website is operated by Premium Plan Limited. Red Potato is a trading name of Premium Plan Limited, which is registered in England with Company No 05977118. Registered office: Kempton House, Kempton Way, PO Box 9562, Grantham, Lincolnshire, NG31 0EA. Premium Plan Limited is authorised and regulated by the Financial Conduct Authority (FRN: 742272). The Red Potato name and logo are trademarks of Totemic Limited. Premium Plan Limited is a member of the Finance & Leasing Association (FLA).