I have no credit! How can I get an auto loan?

It can be difficult to get a car loan without any credit history, but it is not impossible.  Lenders like to see that a borrower has a credit score and credit history because your financial history aids the lender in deciding as to whether they will deny or approve your loan.  Basically, without a credit history, the lender has no way of knowing what type of borrower you will be.  Lenders can’t tell if you are high risk or someone who will pay the loan back on time.  Fortunately, there are banks and dealerships who are willing to finance auto loans with no credit.  It just takes a little “know how” to find out how to navigate the world of auto finance, especially when you don’t have a credit history.

First Time Buyer Programs

There are actually some lenders who have programs designed specifically with first time buyers in mind.  These programs are ideal for people with a long employment and residential history.  Someone who has worked at the same company for two or more years and has lived at the same residence for many more has a better chance for approval.  There are also some lenders who have first time buyer programs aimed at college students.  It is important to check with your bank or credit union to find any available programs that you may qualify for.  While these types of programs are rare, they can be found.  Do a little research to find out if you fit the criteria for a first time buyer program.  If you do not qualify, there are still options available.

If you are able to come up with a down payment or have a co-signer who is willing to help you finance an auto loan, you will have a good chance of qualifying for an auto loan.  A good sized down payment shows the lender that you are able to save money and are committed to paying for your car loan.  Your down payment essentially works as collateral since banks understand you don’t want to lose a large sum of money.  Additionally, a co-signer offers lenders the peace of mind that they will get their loan paid back.  If you can come up with a down payment and/or a co-signer, you will most likely find a lender who is willing to work with you and qualify your loan.

No Credit/Bad Credit

If you find yourself in the situation with no credit history, no down payment, and no co-signer, you STILL  have options available.  You will have to start searching for lenders who specialize in bad credit auto loans.   Begin your search for an online auto finance company or find a dealer in your area that specializes in bad credit auto loans.  Even though you don’t have bad credit, a dealership that finances people with poor credit will also finance auto loans with no credit.   It may not seem fair, but lenders view no credit as the same thing as bad credit.  Dealerships that finance poor and no credit can usually be found in your local newspaper.  If approved directly through a dealership, you will then purchase your car from that dealer.  In this case, the dealer becomes both the bank and seller.

At an auto financing company, such as BlueSky Auto Finance, you can go online and apply for financing through one of our many lenders, banks, and dealerships that we are integrated with.  Once your application is submitted, BlueSky will immediately notify you if a bank or institution has accepted your application, and if so, what steps to take.  Keep in mind that you are not obligated to accept any financing offered to you from BlueSky.  We simply notify you of any banks or dealerships who are willing to offer you a loan in your search for auto loans for no credit.

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