Auto Dealers Offer Fantastic Car Loans to Those Who Have No Credit

Gone are the days when having bad credit or no credit track record will get you kicked out of car dealerships. While the process remains challenging, auto dealers are more lenient in granting loans to car buyers who have zero to bad credit

Zero or No Credit: What It Actually Means

Most first-time car buyers, whether it is for a new or used car, are confused as to how they can get an auto loan with no real credit history. Looking at the term, when you say ‘no credit history’, then it simply means that you never had to use a credit card or apply for a loan in your lifetime. It can also mean either you are too rich that you are able to pay everything in cold, hard cash, or you are just too young to have a personal credit card or apply for a loan.

Fantastic Car Loans

Though this might seem like a good thing, not having a credit history is actually detrimental in getting a car loan as you have no credible reference about how timely you settle your debts. While getting a car loan without credit is not impossible, it can be difficult.

How to get a car loan with no credit history

Most first-time car buyers would have their parents or close relatives with great credit scores act as a co-signer. Others act out of desperation and get whatever financing term their bank or car dealership offers without second thought. However, you need to understand the process of applying for a car loan even without a credit history to be able to get the best deal.

The first thing you need to do is to get a copy of your credit report. You might be surprised to see a long-forgotten membership or an obscure loan popping out of your credit report. Federal laws allow consumers to obtain a free copy of credit report annually from any of the major credit reporting bureaus in the country. This way, you can be sure of whether you indeed have no credit to speak of.

If it turns out that you really have zero credit history, then it would be wise to quickly establish one. This is usually done by applying for a credit card through your bank. If you have no existing checking account, there are banks that still offer credit cards though you may be required to pay an annual fee to be eligible.

After establishing a credit history, you can now apply for pre-loan approval. Remember to choose only those vehicles whose price tags you can afford to pay at least 10% of the deposit in cash to get a better auto loan deal.

Sources:

Buying a car with no credit: 6 things to know, creditcards.com
Can I Get a Car Loan If I Have No Credit?, blog.credit.com

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