Let me be real with you — getting a car loan with no credit is tough. When I was fresh out of college, I needed a car for my first job. I had zero credit history. No credit cards, no student loans, nothing. I thought having a stable income would be enough. Spoiler: It wasn’t.
Dealerships either ghosted me or offered me sky-high interest rates (think 18%+). I was one step away from signing a bad deal just to get wheels. But I did my homework, leaned on the right people, and eventually got approved through a local credit union with only 8.99% interest. Not amazing, but way better than what the dealership tried to push.
I’ve since helped three friends do the same thing — here’s exactly what we learned.
What No Credit Actually Means
Before we jump in, let’s clear this up:
- No credit = You’ve never taken out a loan or used a credit card.
- Bad credit = You have a low score due to missed payments, collections, etc.
No credit isn’t “bad,” it’s just blank. But lenders still can’t tell if you’re trustworthy, so they treat you like a risk.
👉 According to Experian, 62 million Americans have “thin” or no credit files.
Also Read: How Long Does It Take to Get a Student Loan? My Experience + What You Need to Know
Step-by-Step: How to Get a Car Loan With No Credit
1. Know Your Budget Before Anything Else
Before applying, ask yourself:
- What’s your monthly income?
- What are your fixed expenses?
- How much can you realistically afford for a car payment?
Use LendingTree’s car affordability calculator to find a range. Don’t borrow more than you need — you’ll get better approval odds on smaller loans.
2. Check Your Credit Report Anyway
Even if you think you have no credit, it’s worth checking your report:
- Go to AnnualCreditReport.com — it’s free.
- Look for old utility bills, phone payments, or authorized user accounts that might’ve been reported.
Sometimes people have limited credit without realizing it. I found a secured card from my campus bank that was quietly helping my score.
3. Start With a Credit Union or Bank You Already Use
If you have a checking or savings account, start there.
- Credit unions are more personal and often more flexible.
- Many offer “first-time buyer” auto loans made for people like you.
I got approved by Bethpage Federal Credit Union after getting rejected at the dealership. Because I already banked there, they were willing to take a chance on me — even without a score.
4. Use a Cosigner If You Can (But Be Smart About It)
A cosigner with good credit can unlock much better rates.
Pros:
- Lower interest
- Easier approval
- Bigger loan amount
Cons:
- If you miss a payment, they’re on the hook.
- It can mess up relationships if things go sideways.
If you go this route, set up autopay and be transparent. I used my older cousin as a cosigner and we had a written agreement just to keep it clean.
5. Consider Making a Bigger Down Payment
No credit = higher risk. A big down payment helps reduce that risk for lenders.
Aim for at least 10%–20%, but the more, the better.
Benefits:
- Smaller loan
- Lower monthly payments
- Less interest paid overall
I put down $2,500 on a $12,000 used car. That alone took my interest rate from 13.9% to 8.99%.
6. Shop Around — Don’t Take the First Offer
This part’s crucial. Dealerships mark up rates for profit.
Check:
- Your credit union
- Online lenders like LendingTree, Carvana, or Capital One Auto Navigator
- Banks like Chase or Wells Fargo
According to a 2024 LendingTree report, borrowers who compare 3+ loan offers save up to $1,800 over the life of their loan.
7. Bring Proof of Income and Stability
With no credit, lenders look for other signs you’re reliable.
Bring:
- Recent pay stubs or bank statements
- Proof of job offer or long-term employment
- Rent or utility payment history
- References (optional, but helpful)
I showed three months of direct deposits from my new job and a signed lease. That helped ease the lender’s mind.
8. Avoid “Buy Here, Pay Here” Lots Unless You’re Desperate
These dealers offer in-house financing, even with no credit. But here’s the problem:
- Super high interest rates (20%+)
- Old, overpriced cars
- GPS trackers or kill switches in the vehicle
- No credit reporting (you don’t build credit even if you pay on time)
It’s a trap unless you’re truly out of options.
9. Build Your Credit First, If You Can Wait
Not in a rush? Good.
- Open a secured credit card, spend $10–$50 a month, and pay it off in full. In 6 months, you’ll have a score.
- Or try credit-builder loans from places like Self or Chime.
According to NerdWallet, the average secured cardholder sees a score increase of 50–100 points in 6 months.
What Worked for Me (And My Friends)
| Name | Credit Score at Start | Loan Type | Interest Rate | Cosigner? | Down Payment |
|---|---|---|---|---|---|
| Me | None | Credit union | 8.99% | Yes | $2,500 |
| Sarah (friend) | None | Capital One Auto Navigator | 9.25% | No | $3,000 |
| Chris (friend) | None | Dealer finance (Ford) | 14.5% | No | $1,200 |
Moral of the story? The more work you do upfront, the better the deal you’ll get.
Final Thoughts: Is It Possible to Get a Car Loan With No Credit?
Yes — but it takes strategy. Here’s a recap:
- Know your numbers (income, budget, potential down payment)
- Check your credit anyway
- Use your existing bank/credit union
- Consider a cosigner or wait to build credit
- Shop around — don’t accept the first offer
- Avoid buy-here-pay-here unless it’s your only choice
I’m not a financial advisor, but I’ve lived this. And with over 5 years of experience writing for finance blogs and reviewing auto lenders, I’ve helped dozens of people secure financing without getting ripped off.
If you’re willing to prep a little and think long-term, you can drive away without a credit score — and still win.
FAQs: Getting a Car Loan With No Credit
Can I get a car loan with no credit at all?
Yes. Many lenders work with borrowers who have no credit history, though your options and rates may be limited.
How much should I put down on a car loan with no credit?
Try to put down at least 10–20% to improve approval chances and lower your monthly payments.
Will my payments help build my credit?
Yes, as long as the lender reports to the credit bureaus. Always confirm this before signing the loan agreement.
How long does it take to build credit?
According to Experian, it can take 3–6 months of on-time payments to start building a solid credit profile.