Get a Car Loan With No Credit

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Getting a car loan with no credit can be difficult, but it is not impossible. While it’s definitely better to have no credit score than it is to have a bad one, take steps to build up a credit history as soon as you can.

With good credit you can more easily secure a line of credit for a large outlay, signal to prospective employers that you are a responsible person, and find it easier to purchase a home or rent an apartment. Of course, the opposite is true for having bad credit: It will make the financial aspects of your life increasingly difficult. 

Start By Saving for a Loan Down Payment

A down payment demonstrates your commitment to a car purchase and shows you have some hard work invested. Let's be real. If you can’t afford even a down payment, why should anyone trust you with a car and a car loan, and all of the financial responsibilities those two things entail?


One of the best things you can do to increase your chances is save for a down payment. The larger your down payment is, the better your chances of getting a loan.

Once you have saved enough for a down payment, you are ready to start your car purchasing journey. You want at least 10% of the purchase price, but with no credit rating, try to save 20%. To get a car loan without any credit, you’ll need to do a lot of work to prove you’re a financial risk worth taking.

Gather some documentation and ask for help from family and friends before approaching the bank or car dealer for a loan.

Gather Documentation

A major factor in getting approved for a car loan is your credit history. If you have no credit history, the lender will look in other places to verify you can afford the payment and confirm the likelihood you will repay your debt. Gather the following documentation to substantiate your history:

  • Copy of your bank statement
  • Documentation of any recurring bills such as a utility or phone bill
  • Proof of employment history—multiple pay stubs should work

It is important to have, at a minimum, all the documentation listed above. Credit history is not required to open a bank account, however, it will confirm if your account is in good standing. Utility and phone bills are also easily set up without credit history and can provide proof to the lender that you can pay a recurring bill on time.


A source of a steady income is also important. The longer you have been with a single employer, the better, because it shows the lender you can hold a job for the long-haul.

Ask Family and Friends

Family and friends are a great place to start looking for help in financing a vehicle when you have no credit. If they do not have the ability to give you the full loan, it might be possible to have them co-sign on a loan.


A co-signer is an individual other than the borrower who signs a promissory note and in so doing assumes equal liability for the debt. To put it simply, you are using someone else’s credit score to purchase your vehicle.

The bill comes to you, but if you don’t pay, the co-signer is responsible for the loan— and their credit will suffer if they don’t make the payments. A late payment can damage both your family member’s credit and your relationship with them. If you do get the full loan amount from someone you know, lay out a solid plan of repayment. Consider getting help from a trusted legal adviser, so the situation is less likely to get sticky. At the minimum, you should:

  • Agree to a set interest rate and time frame of repayment.
  • Print out an amortization schedule.
  • Always make payments on time and do your best to pay off your loan early.

Inquire About a Loan at a Bank or Car Dealership

If you've exhausted all other options, start at the bank or credit union where you have an active account. They will have easy access to your account history and will be more likely to give you a loan if you have a prior relationship with them.


If you do not have a bank account, set one up as soon as possible. You are more likely to get a better deal at your bank than a car dealership.

If your bank is unable to help you, you can try the car dealership. However, you may find that whatever issue prevented you from getting a loan at a bank makes getting a loan from the dealership fairly risky. Car dealerships either work through banks or offer loans at much higher interest rates.

If you can't get a loan from your bank, try shopping around at a different financial institution. A local credit union, for example, may offer more options for car loans. Before you even open an account, let the bank or credit union know that you are looking for a car loan so you can explore all your options. Whether you are at the bank or the car dealership, you'll need to have the documentation you've gathered ready for their review. Most bankers are familiar with customers seeking car loans in spite of bad credit, and they'll be able to help find a solution that works for you.

A car loan can be complicated to obtain without prior credit. Building good credit is vital for your financial future. With a little planning, you will be driving your new set of wheels in no time.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Consumer Financial Protection Bureau. "Who Are the Credit Invisibles?" Page 7.

  2. Kelley Blue Book. "What Is the Typical Car Down Payment?"

  3. Federal Trade Commission. "Financing or Leasing a Car."

  4. Consumer Financial Protection Bureau. "Co-Signing a Loan."

  5. Consumer Financial Protection Bureau. "Take Control of Your Auto Loan."

  6. Consumer Financial Protection Bureau. "Learn to Explore Loan Choices."

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