Getting a car loan without any credit history can be tricky, yet it is not that uncommon for someone to suddenly find they need a loan for a new car but they don’t have any credit history. Does this sound like you – you have paid cash or with a debit card when making purchases and used pre-paid mobile plans because you thought you were being financially responsible. Then, when it comes time to get a loan, you run into difficulties.
Why do you need credit history?
Lenders like to be able to assess how much of a financial risk it may be to lend you money. They assess things such as whether you have enough income to make your monthly repayments and what types of credit or loans you have repaid successfully.
While having no credit history is better than having a bad credit history, a lender may decide to err on the side of caution and elect not to lend to you as you are considered to be an unknown risk.
So, what can you do?
There are a number of strategies you can implement to build a credit history and/or establish that you aren’t a risk.
While it’s not impossible to get a car loan if you have no credit history, it can prove to be challenging. Following the tips we’ve provided and getting some expert advice will help improve your chances.