Can I get approved for a car loan if I don’t have any credit?

Getting an auto loan with no credit history

Applying for an auto loan without any credit history can be an extremely frustrating experience because you may be treated as though you already have bad credit when in fact you haven’t even begun your credit history.

Consider bringing in a cosigner. A cosigner is someone who agrees to pay the loan in the event of you defaulting on the loan. Since the cosigner is equally responsible for the loan, their credit history is taken into consideration too. So, a cosigner with fantastic credit may result in a much lower interest rate than if you had applied alone.

Keep in mind, however, that cosigning is not something that should ever be taken lightly. The auto loan will show up on your cosigner’s credit report, just as it does on yours.

So, if you have a late payment you’re not only affecting your credit score but also the credit score of your cosigner. For this reason, only use a cosigner who is actually willing (and able) to take over the monthly payments if you aren’t able to for one reason or another.