Establishing a strong credit history takes time. As the primary car buyer, you are responsible for the loan payments. Keep in mind that co-signers become responsible for the loan if you are unable to repay.Owning a vehicle is every traveler’s dream but very often getting required funds from own sources becomes tougher. Availing loan therefore is only option left. But in case the loan seeker is labeled with no credit history,then lenders are hesitant as risk involved in the loan goes higher.Occasionally, having no credit history can be as bad as having a poor credit history. Before granting credit, lenders need to gauge an applicant's creditworthiness. If you have no previous creditors, a prospective lender may consider you a high risk and either deny a credit application or offer a high interest rate. This applies to credit cards and automobile loans.
Fortunately, there are many options available to those hoping to obtain a vehicle loan with no credit history.Having at least one credit card can contribute to getting a low rate on an auto loan. Auto finance companies prefer applicants with a previous credit history. With this said, it may help to get approved for a major credit card, gas card, or store card.
If financing a new or used car, it helps to have some sort of credit history. This way, lenders can receive an idea of likely credit habits. When a person with no credit history attempts to buy a car, most finance companies are hesitant to approve the loan application. Although some lenders will take a chance, those with no credit history will pay a higher interest rate.
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