Can I Finance a Car with No Credit?

Get Car Financing
Even with poor credit.

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - February 18, 2020

In auto financing, there's a big difference between bad credit and no credit borrowers. But can you really finance a car with no credit? It may be possible if you're working with the right lenders.

The Difference between No Credit and Bad Credit

When you have no credit, it typically means that you don't have enough information on file with the three major U.S. credit bureaus to have a credit score. This is known as having a thin file, or being a credit ghost. Just because you don't have much information on file, however, doesn't mean your credit score is missing or zero.

Credit scores range between 300 and 850, and when you're just starting out with credit, you're likely to have a score on the lower to middle end of the scale, which is generally considered a fair credit score.

Consumers with thin credit files are typically young adults, new citizens, or those who have opted out of using credit for an extended period of time. If you fall into one of these categories, your credit score could be similar to those of borrowers with poor credit. But don't worry, lenders can tell the difference!

People with bad credit typically don't have a thin credit file, but rather a file that shows a history of financial missteps, such as late or missing payments, bankruptcy, or repossession. Lenders are generally more lenient toward no credit consumers than those with poor credit.

Financing a Car with No Credit

As a no credit borrower, you typically have a better chance at financing through a special finance dealership with the lenders that work with people in unique credit situations. These lenders often offer things like first-time buyer programs that can help you get the financing you're looking for.

These types of auto loan programs rely on factors outside of your credit score to consider you for approval. They look at your income, employment, and residence stability, among other things. Many first-time buyer programs may have additional requirements like a larger down payment or the need for a cosigner.

If you're unable to qualify with a lender at a special finance dealer, you may still be able to get financed through a buy here pay here (BHPH) dealership. These dealers, also known as no credit check dealers, offer in-house financing, which means they are also lenders.

BHPH dealerships typically don't check credit, and rely more on your income and your ability to make a down payment. Additionally, BHPH lots only offer used cars, and you're likely to see a higher than average interest rate on a loan.

Finding a No Credit Car Loan

It is possible to get an auto loan with no credit, but you have to find the right lender for the job. How do you know if you're working with a lender that can deal with unique credit situations such as no credit?

The dealers that work with these lenders don't always advertise their special finance departments. You could drive from dealership to dealership only to be turned down time and time again, but if you're looking for a less stressful way to find financing, you should start here.

At CarsDirect, we work with a nationwide network of special finance dealers that have lenders available to work with no credit, bad credit, and even bankruptcy. Save yourself the time and hassle of searching on your own, and fill out our free car loan request form instead.

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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