Can I Get an Auto Loan if I Have No Credit?

Get Car Financing
Even with poor credit.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - July 13, 2018

Even though bad credit can affect what type of car loan you can get, you could qualify for an auto loan with little to no credit history with some careful planning.

How to Get a Car Loan with No Credit

Whether you’re a recent college graduate or you’re just a first-time car buyer who hasn’t established your credit history yet, you should know that everyone starts from the bottom and works their way up. Car dealers know this, and many have subprime lenders that specialize in these types of credit situations. In this case, the process of taking out a car loan with no credit is a little different compared to having a well-established credit history. It requires more planning and research – but that's not a bad habit to get into when making large purchases.

The Steps to Take

Before you look for a dealer and a car, you should take these three steps to better prepare yourself for the car buying process:

  1. Request your credit score and credit reports – It’s helpful to know where you stand, credit-wise, before you head to a dealer. Even if you’re 100 percent sure you have no credit history, you may find that you do when you request your credit reports. Most lenders look at your FICO score, which you may have to pay for, but you’re entitled to a free copy of your credit reports every 12 months from the three major credit bureaus: Experian, Equifax, and TransUnion.
  2. Budget – Make sure you have a set budget for a vehicle. There are many online tools and calculators that can help you get an idea of what to expect when taking out a car loan. Also, make sure you have a down payment. When dealing with a subprime auto loan, lenders typically require a down payment of $1,000 or 10 percent of the vehicle’s selling price, whichever is less.
  3. Consider a cosigner – If you’re starting with zero credit, you may want to consider a cosigner. Having one increases your chances of approval, and some lenders may even require this if you have no credit. A cosigner must meet all lender requirements, including income unless you’re married, so you’ll want to make sure you discuss their role and get their approval before applying.

Don’t Let Bad Credit Hold You Back

Bad credit doesn’t have to set you back from getting a car. Many consumers start from zero as adults and there’s nothing to be ashamed of. If you’re ready for a car loan, but aren’t sure where to begin, start with us at CarsDirect.

We work with a nationwide network of special finance dealers that have the lending resources available to work with people who have bad credit, no credit, or even bankruptcy – and we can help take the hassle out of searching for them. Simply fill out our online auto loan request form and we’ll start the process of matching you with a local dealer today!

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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