Everyone knows that bad credit can hurt your chances of getting a car loan, but did you know that no credit can do the same? It’s not easy when you’re trying to avoid getting financially tied down with loans and credit cards, yet you need to establish your ability to pay. There are ways to go about building a good credit history without going into significant debt.
No Credit Car Financing Step 1: Review Your Credit Report
In order to know what you need to do, you have to start by looking at your credit report. If you only had one or two loans or credit cards in the past and defaulted on them, your score may look very low. It’s easy to see how minimal history doesn’t make this a good representation of your ability to pay, but it is what a lender will see. If possible, make arrangements to pay any outstanding debts showing up on your report, no matter how small.
Once you do that, or if you have nothing on your credit report, it’s time to move on to step 2.
No Credit Car Financing Step 2: Start Small & Build Credit
Unfortunately, there is no way to avoid borrowing if you want to build credit. What you can do is keep the risk low and start with something manageable, like a small loan or secure credit card. The credit card is usually the easiest option. The way it works is you pay money that is then available on your card. For example, you pay a $200 deposit then have that amount available in credit. Make sure you are applying for a credit card and not a prepaid card which won’t help your score.
You won’t see an improvement overnight. The process takes some time. Experts recommend maintaining your credit line for a minimum of six months. Make sure you pay on time to give your score the biggest boost. It’s much easier to overcome no credit than it is bad credit. Check your report regularly to watch for changes.
If your credit report is looking a little less than perfect and you’re in need of a car loan, our team of experts may be able to help find you a lender who is willing to help you out. There are tonnes of lenders out there who are willing to give the average person a fair go – it’s just a matter of finding them!
Taking out a car loan with Zoom Car Loans and ensuring that you make regular, on-time repayments, could be the opportunity you need to repair your credit report.
No Credit Car Financing Step 3: Find the Right Car Loan
After six months has passed, you may be ready to apply for a car loan. The key is finding a lender who is flexible and willing to work with someone who has a limited borrowing history.
If you can’t wait six months, contact Zoom Car Loans. The experts at Zoom have access to a wide range of lenders who are willing to work with borrowers who have little to no credit history. The best part is, once you are approved and begin paying your loan back, you’ll build credit! Learning how to finance a car with no credit is easy. Visit the Zoom website and complete the online assessment form or call 1300 138 273 to talk to a lending expert.