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How To Buy A Car With No Credit Score

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If you have an account with a bank or credit union, ask whether they offer special financing deals for customers with no credit. While you should expect to pay a higher interest rate than consumers with established credit, you may find lower interest rates here than at the dealer. Getting pre-approved for a car loan can save you money and make the entire car-buying process less stressful.

Since lender criteria vary, there is no set credit score that you need to get a car loan. Generally, lenders prefer borrowers with credit scores above 660, but there are many lenders who work with bad-credit or no-credit buyers. Remember: the lower your credit score, the harder it can be to qualify for an auto loan.

Building your credit for the first time can take at least six months of reported activity before you can expect to see an impact on your credit score. This diligent work on your credit is worth it, however, as building a robust credit profile can translate to lower interest rates and higher loan amounts.

In general, the best financing options for buying a car with no credit come from reputable lenders. The loans will also come with relatively competitive rates and favorable terms. Avoid predatory loans with astronomical rates, as it could be difficult to afford the monthly payments.

Being responsible with your debt correlates to a more positive credit history and report. In contrast, failing to pay down your debt as agreed negatively impacts your creditworthiness, making you a riskier borrower in the eyes of banks, credit unions, and other lenders.

Store cards typically carry higher interest rates and lower credit limits than regular unsecured cards, making them easier to qualify for. However, they may be restricted for use only in a specific store or group of stores. As with other cards, payments made toward the balance of a store card impact your credit.

Peer-to-peer, or marketplace lending, matches borrowers with lenders via online platforms or marketplaces. Each market or broker specifies its acceptable credit ranges. Some will require you to have a strong credit history and good credit score, whereas others will allow you to qualify with bad or no credit.

Search for local nonprofits, charities, and churches that provide assistance and guidance for buying a car without any credit. Assistance is commonly provided through a loan for those below a certain income level or borrowers with bad credit. In other cases, grants may be made available to those looking for a car but otherwise unable to afford one.

Active duty and retired service members may be able to take out a military car loan. Military car loans are designed to be easier to qualify for by those with little to no credit, and often have more favorable rates and terms than other comparable auto loans.

Trying to buy a car with no credit and no cosigner can often lead you to certain unscrupulous lenders looking to take advantage of your situation. Additionally, some types of loans are structured in a way to almost guarantee your ability to qualify, but come with the trade-off of exorbitant interest rates or punishing terms.

We help people save money on their auto loans with a network of 150+ lenders nationwide.* This value was calculated by using the average monthly payment savings for our customers from January 1, 2021 through December 31, 2021.

Our top three recommendations for no-credit auto loans are myAutoloan, Autopay and Auto Credit Express. Be aware that the starting annual percentage rates (APRs) below apply to borrowers with good credit histories, so they may not be available to no-credit customers.

If you have time, it may be worth it to build some credit before buying a car. You can build an average score in as little as six months if you consistently use credit wisely. One way to start is by opening a credit card with a low limit and paying it off each month. Just put some expenses you normally cover with cash on the card, like groceries or gas, and pay the


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