Everyone wants to own a car at some point. It’s just not a matter of luxury but also of necessity. An urban dweller who has to commute long distances might require a car to make their lives easier. The catch, however, lies in getting the necessary funds for the investment.
Auto loans have emerged as an excellent option for people to buy a car of their choice. Getting an auto loan, however, isn’t a very easy task. It requires the applicant to have a minimum credit score. But what if you are a first-time applicant with no credit history at all? Can you acquire a loan in such a situation?
Yes, of course, you can. If you are wondering how then here are a few tips to follow:
Get your credit report in place
Even if you don't have a credit history, you need a credit report from the authorized bureau for the application. You have to check your credit report for any inaccuracies so that there is a fair representation of your financial position.
Start budgeting
After analyzing where you stand financially, you should start budgeting your car purchase. You should estimate how much you can spend on the car and leave enough for other financial commitments.
Get a cosigner
Having a person who would sign to pay off your loan in case you can’t prove extremely useful when you are applying for a loan for the first time. A cosigner can be anyone you know who has a good credit score to appeal to the lender.
Check different lenders
Some auto loan providers have a minimum credit score requirement, while others don’t. They provide auto loans to first-time applicants as well as to people with bad credit scores. You can check them out online and compare their schemes. Go for the one that suits your pocket the best.
Build your credit
You can secure a credit card from your bank and build a credit history by using it to make payments. This will help you show your creditworthiness to the lender. You should, however, ensure that you pay these credit card bills on time to avoid late payment penalties.