Can You Finance a Car with No Credit? YES!
You've finally saved up enough money for a down payment on a new car. Congratulations! But there's just one problem: you have no credit. And you're worried that without any credit history, you won't be able to get approved for an auto loan.
Never fear! Here at Car Choice, we specialize in helping people with no credit get behind the wheel of a brand-new car. In this blog post, we'll dispel some of the common myths about financing a car with no credit and show you just how easy it can be to get approved for an auto loan - even if you've never had a credit card before. Keep reading to learn more!
How Does Financing With No Credit Work for a Car Loan?
One of the main reasons that car buyers with no credit have a hard time getting approved for a car loan is that lenders see them as risky borrowers. After all, without any established credit history, it can be difficult to determine whether or not someone will make their car payments on time.
At Car Choice, we understand these concerns, and that's why we work hard to make car financing with no credit as simple and painless as possible. Our team of auto financing experts will take the time to evaluate your unique financial situation, so they can determine the best loan option for you.
Whether you need a traditional car loan or want to explore other financing options, like leasing, we'll help you find a car loan that works for your budget and your unique credit history. Plus, our streamlined online car financing process means that you can get approved for an auto loan from the comfort of your home - no trip to the bank or dealership required.
So if you're ready to hit the open road in a new car, but have no credit history to show for it, don't let that hold you back. Read below about the three major myths about financing a car with no credit.
Myth #1: You Need Excellent Credit to Get Approved for an Auto Loan
One of the biggest myths out there is that you need excellent credit to finance a car. And while it's true that having good credit history will give you access to the best interest rates and repayment terms, it's not true that you need excellent credit to buy a car.
We do agree that credit history matters, however only 20% of Americans have a credit score of 800 or higher. So how do the other 80% of Americans get approved for a car loan?
Many people choose to get approved by using alternative methods, such as paying cash for a larger down payment or looking for a car loan provider that caters specifically to those with lower credit scores. Many car dealerships or lenders and financial institutions now specialize in working with customers who have bad or no credit at all, making it easier than ever to finance the car of your dreams.
So if you're worried about your credit score impacting your car-buying experience, don't be. There are plenty of options out there for you, and with the right preparation and research, getting approved for an auto loan is a breeze.
Here at Car Choice, we provide dealer financing and work with several different lenders who are willing to work with borrowers of all credit levels - including those with no credit history at all.
Myth #2: Financing a Car Will Ruin Your Credit History with Credit Unions
Another myth that we often hear from our customers is that financing a car will ruin their credit score with major credit bureaus. And while it's true that missed payments can damage your score with a credit union, making timely payments on your car loan can help improve your credit rating in the long run. Other major factors that can improve your credit score are having a steady income and maintaining good credit card habits.
However, when you pay your monthly payments for your car on time and in full, it shows future lenders or a credit union that you're responsible and capable of repaying loans - which will make them more likely to approve you for future auto loans, lines of credit, and so on. This is great because car financing is often the first step to improving your credit score.
There are no credit auto loans available when financing a car, which means you can still get approved for an auto loan even with no credit history. Those are typically available to people that meet certain criteria like having a job or steady income, have not declared bankruptcy in the past five years, and so on.
So if you're worried about ruining your credit score with credit unions when financing a car, don't be - by making timely payments and taking advantage of credit-boosting resources like credit auto loans, you can improve your credit over time.
Whether looking for a car loan with no credit, needing special financing, or just looking to see what a loan with Car Choice could offer; at the end of the day financing a car could help you build credit plus improve your chances of getting approved for other types of loans in the future.
Financing is one myth, but what about getting approved? That leads us to our next myth, which is not getting approved without a cosigner.
Myth #3: I Won't Be Able to Get Approved Without a Cosigner
This myth is similar to Myth #1 in that it presumes that you need someone else - in this case, a cosigner - to get approved for a car loan. A cosigner is someone who agrees to be responsible for your loan payments if you can't make them yourself. And while having a cosigner can sometimes improve your chances of getting approved for a car loan, it's not always necessary. The reason being is that you can still get approved depending on your length of residence, income verification, and credit history.
But don't worry - there are plenty of ways to get approved for a vehicle purchase, even if you don't have a perfect credit history or if your income is not substantial. The most important thing is to be prepared and know what options are available to you so the best vehicle can be selected to fit your needs based on the lifestyle you live and the monthly payments you are needing.
In many cases, our team here at Car Choice can help connect you with lenders who are willing to work with borrowers without cosigners. So if finding a cosigner is proving difficult (or if you simply don't want one), don't worry - we can still help you finance the car of your dreams!
As you can see, there are several common myths about financing a car with no credit or even bad credit floating around out there. But the truth is that financing a car with no credit is easier than you might think - and at Car Choice, we specialize in dealer financing by helping people with little or no credit history get behind the wheel of their dream cars with a monthly payment that fits their budget.
So if you're ready to start car shopping for your new ride but are worried about getting approved for a car loan, don't be! We can help you get approved - no matter what your credit situation looks like and have you feeling happy about the budget-friendly monthly payments on your next vehicle. Contact us today or stop by a Car Choice dealership to learn more!