If you’re new to the credit world, or never took time to build a credit history, you may be wondering if you can get a car loan with no credit. It is possible to get a no credit auto loan. We lay out the differences between the three main types of lenders you can apply for a no credit car loan with, as well as the typical requirements you need to meet.

Try to Get Pre-Approved First

Getting a No Credit Auto LoanGetting pre-approved for an auto loan is a great way to get a good deal, and the first place you should look for a loan is your bank or credit union.

It’s possible to get approved for car financing with no credit if you’ve had a good relationship with your lending institution. Plus, you may even have a credit score and not know it until the lender checks.

The lender tells you whether or not you’re pre-approved. If you are, you can get a copy of your pre-approval and take it with you to a dealer. If you’re turned down, you need to work with a lender that handles unique credit situations.

No Credit Lenders to Consider

When you have no credit and can't get approved with your bank or credit union, you’re left with two other main options: subprime lenders and buy here pay here (BHPH) dealerships.

Both of these types of lenders specialize in working with consumers in unique credit situations. However, they operate differently and have different requirements that need to be met:

  1. Subprime lenders – These lenders work through special finance dealers. Getting an auto loan with no credit with a subprime lender gives you a chance to build credit as long as you make all of your payments on time. Subprime lenders use your credit score to qualify you, but they also look to other factors like your income. You generally need to meet the minimum income requirement, as well as provide proof of residence, proof of income, a list of personal references, and proof of phone. If you have no credit or thin credit, you may be asked to get a cosigner or co-borrower. Having one on your loan helps you get approved, and may even get you a better deal than you’d get on your own.
  2. Buy here pay here dealerships – BHPH dealers offer in-house car loans, which means they are also lenders. It's much easier to get approved for an auto loan at one of these places because many of these dealerships don't check your credit. This means it won't even matter if you have nothing to show. As long as you have a qualifying income and a down payment, you’re in good shape. A major downside of a BHPH car loan is that you don’t always get a chance to build credit. Some of these dealers don’t report loans or on-time payments to the credit bureaus. Make sure to ask about their reporting policies ahead of time if you're interested in building up your credit.

Finding a Dealership to Work With

Finding dealerships that can handle no credit situations can be tough. Luckily, at Auto Credit Express, our specialty is connecting consumers to local dealers that know how to handle unique credit situations.

We work with a nationwide network of special finance dealerships and BHPH dealers, and we can set you up with one near you. Fill our simple and free auto loan request form to get the process started right now!