Refused Car Finance In Ireland? Here’s What To Do Next
Just seen that dreaded application decline message? Being refused car finance is fairly common, but how people respond varies. Within 24 hours of a car finance refusal, here’s what you should do.
Check For Any Errors On Your Application
Check for any errors or misspellings in the application you submitted. You’d be surprised how many applications fail because a street or EIR code was slightly wrong.
Avoid Multiple Applications Back To Back
Avoid applying to as many lenders as possible. Irish car lenders are required to perform full assessments as soon as you apply, which means a hard credit check on your file. Applying with multiple lenders will lead to multiple hard searches appearing on your file to future lenders.
Opt For A Specialist Lender
Look for a lender who reviews applications manually. If you’ve been refused car finance, your chances of approval with an automated lender assessment are slim. Look for a lender that assesses manually and takes in the entire picture to boost your chances of approval.
Why Have I Been Refused Car Finance? The Most Common Reasons
There are plenty of reasons why you could have been refused car finance. Here are the most common ones.
Poor credit scores, limited credit histories and multiple visible hard credit checks are some of the most common credit-related causes of refused car finance👇.
Bad Credit Score
Past missed payments or recent defaults tell lenders that you are a risk, which for some can be too much and can lead to refused car finance.
Limited Credit History
Young drivers may lack a credit history. No past financial benchmarks present a risk to lenders.
Multiple Past Applications
In Ireland, lenders are required to carry out a hard credit check at the point of applying. If you’ve applied to multiple lenders, you’ll have multiple hard credit checks, which hurts your chances of approval.
Multiple financial commitments, leaving limited extra cash for finance, can be a reason a lender might reject you. Your job status plays a part, too. Some lenders, excluding LMO, refuse to support self-employed customers, even if their profile is strong.
High Debt-To-Income-Ratio
Having multiple existing financial commitments can leave you with limited disposable income per month. If this is the case, a lender will doubt your ability to meet a car finance repayment commitment.
Job Status
Some lenders refuse self-employed customers and those who have changed jobs frequently. Lenders see this as a risk due to unstable monthly earnings.
Simple mistakes like a misspelt address can lead to a refusal, as can the choice of vehicle you request finance for. Additionally, if you only hold a provisional licence, you may be rejected by some lenders.
Simple Application Mistake
Typos and spelling mistakes are some of the most common reasons for refused car finance.
Vehicle Choice
If you already have a vehicle in mind but it’s out of your price range, lenders may refuse you for finance, even if your application is strong.
Licence Issues
Some lenders don’t support provisional licence holders, which could be an instant reason for a decline. LMO supports provisional licence holders.
Warning: If you do not meet the repayments on your hire-purchase agreement, your account will go into arrears. This may affect your credit report, which may limit your ability to access credit, a hire-purchase agreement, a consumer-hire agreement or a BNPL agreement in the future.
Warning: You may have to pay charges if you pay off a hire-purchase agreement early.
How LMO Can Help Refused Car Finance Customers
Here at LMO, we take a complete approach to applications, looking past the traditional credit score and taking in the full customer picture. For someone who’s been refused elsewhere, this can sometimes be the difference between further declines and that yes that you’ve been waiting for. That’s not all, though.
✔ Decisions based on your individual circumstances
✔ Self-employed applications welcome
✔ Decisions within 30 minutes
✔ Borrow up to €35,000
✔ Terms from 24–60 months
✔ Human support throughout your application
✔ Rated excellent on Google and Trustpilot
FAQs For Refused Car Finance Customers
I’ve Been Refused Car Finance, What Can I Do?
In the first 24-48 hours, comb over your application and make sure there are no spelling errors or mistypes. Avoid applying to every lender you can find. The temptation to find an acceptance somewhere else is strong, but applying with multiple lenders will lead to multiple hard credit checks showing on your profile, hurting your chances even further. In the longer term, build up your credit score and finances to strengthen your application and boost your chances of approval.
What Are The Reasons For Being Refused Car Finance?
- Bad credit score.
- Limited credit history.
- Multiple visible hard credit checks on your profile.
- High debt-to-income ratio – limited disposable income.
- Job status. Some self-employed customers face rejection.
- Choosing a vehicle that is out of your budget.
- A minor spelling mistake or mistype on your application form.
Your application could fail for many reasons, which is why it’s important not to act rashly after a refusal and start applying with multiple lenders before you know the reason the application failed.
Is It Bad If I Get Rejected For A Car Loan?
No, getting refused for car finance isn’t bad. Plenty of people with solid profiles simply don’t fit with a certain lender, but that isn’t to say they can’t get finance elsewhere. If you’ve been refused car finance in the past, look for a specialist lender that reviews applications manually, like LMO.
Can I Get Car Finance With Bad Credit History In Ireland?
Yes, you can get car finance with bad credit history in Ireland. Specialist lenders like LMO support bad credit customers, providing flexible finance solutions, holistic application assessments and tailored finance products to suit your circumstances.
What Is The Biggest Killer Of Credit Scores?
Missed payments and defaults are the biggest killers of credit scores, as they indicate that you can’t handle credit and finances responsibly. Credit scores aren’t permanent though, and plenty can be done to reverse your credit profile:
- Register on the electoral roll.
- Pay off any outstanding commitments.
- Avoid making several finance applications in a short period.
Visit our credit score support guide for more tips on improving your score.
How Does Refused Car Finance Affect My Credit Score?
Refused car finance will affect your credit score by showing a hard credit check to future lenders. Refused car finance itself doesn’t show up. If you are refused for finance, your credit score will likely drop a few points due to the hard credit check.
Can I Get Car Finance As A Self-Employed Customer With Bad Credit?
Yes, you can get car finance with bad credit and self-employment, but your chances of approval will be lower than for someone with a stronger credit score in full-time employment. This is because they have demonstrated greater financial responsibility and a stable monthly income.
If you have bad credit and are self-employed, you can boost your chances of car finance by:
- Choosing a car that is affordable.
- Placing a large deposit.
- Don’t apply with multiple lenders at once.
- Settle any existing financial commitments and outstanding payments before applying.
- Choosing a specialist poor credit provider like LMO.
Why Choose LM Operations For Self-Employed Car Finance?
✔ Decisions based on your individual circumstances
✔ Self-employed applications welcome
✔ Decisions often within 30 minutes
✔ Borrow up to €35,000
✔ Terms from 24–60 months
✔ Human support throughout your application