No Credit Auto Loan
How to improve your credit rating
Finding no credit auto loans can be a real pain in the behind and sometimes it may even seem impossible. No credit means an individual has little or no credit history for one reason or another including: immigrants to the US, college students, divorcees, widows and low income workers.
Having little or no credit history produces a low credit score because there isn’t enough information to assess the risk of lending to an individual. Without knowing the person’s credit history auto loan companies are wary and most don’t offer car finance loans to such individuals. However, there are a number of auto financing companies that do offer no credit auto loans; the only issue is that they usually charge much higher interest rates.
Recent market research has shown that approximately 50 million people in the US have poor credit scores due to little or no credit history. This has not gone unnoticed by creditors and car financing companies and so it is possible to find no credit auto loans. The problem then becomes finding the best deal because no credit loans come with high interest rates.
Tips on finding no credit auto loans:
· Know your credit score before you go shopping for car finance loans.
· Get quotes from a number of finance companies, local banks and credit unions before you buy a car. Finance companies usually offer lower interest rates than car dealerships.
· Another way to lower interest rates on no credit auto loans is by paying off as much as possible in the down payment. This would certainly put in better stead with the bank or financing company and reassure them that you are serious about purchasing the vehicle.
While there are many companies that offer no credit auto loans it is a good idea to make a start on improving your credit score. Not only will it improve your chances of getting approved for an auto loan without the over-the-top interest rates but it is a good strategy for your financial future.
Paying rent and bills on time will greatly improve your chances of being approved for other credit applications in the future, such as a mortgage. The following are some tips on how to build a good credit history:
· In many cases those who are turned for loans due to no credit history do in fact have a credit; it just wasn’t reported by the creditors. Examples of these include local banks, credit unions and rent collectors. You can request that they begin reporting your payments but they are not obliged to do so. Next time you open an account with anyone, ask them if they report payments to credit-reporting agencies.
· Begin building up a good credit history by getting a secure credit card and opening a savings account. However, don’t send too many applications as this can have detrimental effect on your score as quite often people expecting money problems try to offset their debts by getting more credit.
· There is a new FICO credit score that may help those with little or no credit history by drawing on information from smaller credit reporting agencies and not just from the three major bureaus. This will not help those who have low credit scores because they have not paid bills or have been late paying bills on a regular basis.