No Credit Car Loans - Getting a Car Loan with No Credit
Because many auto loan lenders are willing to assist individuals with all credit situations, it is possible to obtain a new or used car loan with no credit history. In some instances, those with no credit history are lumped together with bad credit applicants. However, there is a huge difference. Here are a few tips to help you get approved with no previous credit history
Open a Checking or Savings Account
When applying for an auto loan, lenders want to see evidence that an applicant is responsible. In most cases, a credit report is sufficient. However, if an applicant has no previous credit, they may be willing to consider other factors. For example, does the applicant have an active checking or savings account? If so, maintaining a good account standing with the bank may serve to your advantage.
Moreover, having a utility bill in your name also helps. This way, potential auto loan lenders are able to observe your willingness to pay bills on time.
Maintain Regular Employment
Along with reviewing past credit history, auto loan lenders also consider an applicant's income and work history. Individuals who have developed a habit of jumping from job-to-job are decreasing their approval odds. Lenders desire stable applicants. Additionally, applicants must earn a reasonable salary. For example, if your salary after taxes is only $800, most lenders will not approve a loan which involves a $500 monthly payment.
Get a Credit Card
The majority of individuals who apply for auto loans with no previous credit history are young adults and college students. However, these persons are generally able to obtain their first credit card with little hassle. For this matter, it helps to apply for a major credit card or retail card and begin establishing credit. In as little as six months, your credit score will improve, which boosts your chances of getting a car loan.
Get a Co-signer for Auto Loan
Another easy method for obtaining a car loan approval with no credit history is asking a parent, sibling, or grandparent to co-sign the loan. Co-signers put lenders at ease. If the primary borrower is incapable or skips out on payments, the person who co-signed the vehicle loan becomes responsible for making the payments.
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