No Credit Car Loans - Car Loan
Approval with No Credit History |
By Carrie Reeder |
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Getting an approval for a car loan when you have no credit history
can often times be almost as difficult as getting a car loan
approved when you have bad credit. There are things that can be
done, however, which will improve your chances of finding a no
credit car loan.
Ask your employer for a letter of
reference - Include your length of employment, your current
gross wage and your current net wages.
Prepare a personal
payment history. Included in this history should be a list of
all the bills you pay on a monthly basis which are not reported
to the credit agencies. Ask your landlord for a letter of
reference. Utility companies will also generally provide you
with payment histories. If you have any small installment
accounts at local retailers which don't report credit, ask them
for credit statements as well.
If you don't already
have one, open a checking account - Have your paycheck sent
to your bank via direct deposit if your employer offers this
service.
Open a savings account at the same institution
as your checking account. Authorize a regular deposit into your
savings account out of your paycheck. Link your savings account
to your checking account to limit the possibility of an
overdraft.
While you are shopping for the car you want
and for a lender, set aside additional savings specifically for
a down payment on your car.
Once you have taken these
steps, you are ready to approach a lender for your no credit car
loan.
The first lender you should approach is the
financial institution with which you have your checking and
savings accounts. Many times banks or credit unions will work
with customers who have no credit histories if their accounts
are in good standing and they have some sort of down payment.
When shopping for your car, look for dealers who offer credit
for first time buyers. You must approach these dealers with
caution. Sometimes they will inflate the car prices or charge
exorbitant interest rates. Make them aware that you are looking
at several lenders and will be comparing their proposals.
Allow your payment to be debited from your checking account
- This may help compensate for the fact that you don't have any
credit history for the lender.
Arm yourself with
knowledge. Know what the current interest rate is for the most
credit worthy applicant. If you have sufficient income, a down
payment and no negative credit your interest rate should not be
significantly above that rate. Be realistic about the type of
car you select. You may not be able to get your dream car but
there are many late model, low mileage cars for which you can
qualify when seeking approval for a no credit car loan.
Most importantly, after you have successfully obtained you auto
loan, make your payments in a timely manner. Do not overload
yourself with debt and don't have lenders constantly making
inquiries about your credit. By following these simple rules,
the next time you look for a car loan the process will be much
easier. |
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