A right of passage for young adults of jumping into the ring of adulthood is buying a car on their own; one that they are personally paying 100% of all costs associated with vehicle ownership. However, paying for a car outright is likely not an option and therefore some sort of financing is going to be needed. However, since you probably at most only have a utility bill or two in your name, your credit history is likely minimal. Having no credit will make getting approved for an auto loan more difficult since lenders really don't have anything to go on when computing your credit worth. However, getting an auto loan with no credit is not an unreachable goal. There are a variety of things you can do to assist yourself. In addition to the information featured below, we suggest you reading about how to build credit and going from no credit to good credit.

Contribute a Sizeable Down Payment
The best thing you can do to help yourself show lenders that you are worth of them lending to you is establish that you are committed to your auto purchase and loan. This can be achieved by saving enough money so that you are able to put down a significant down payment for your purchase. The bigger your down payment the more you will be invested in your car and the more serious lenders will take you. Think about, how could you possibly be taken serious if you were to walk into a dealership looking to buy a $25,000 or higher vehicle with no credit and no down payment?

Get Together Any Documents That Show Any Degree of Credit
Your credit rating is always going to be the main factor influencing lenders' decisions in determining their want to grant you your requested loan. And if you have no major credit established from a previous car loan, mortgage, credit card, etc., then you will need to dig a little and locate the credit you do have. Below are a few ideas of where you may have established the beginnings of a credit history that may not have a major impact on your actual credit score but when physically presented to a lender may help your cause. So get these documents together!

1) Copies of Bank Records/Statements - Having a bank account with monies in savings is positive. Also, a strong checking account history of no bounced checks or overdrawn accounts will help. In addition, definitely document any automatic payments of reoccurring bills (cell phone, cable, internet, etc.) from your account. Lenders will definitely appreciate your ability to satisfy monthly obligations timely via automatic drafts from your bank account since that's how auto loan payments work as well.

2) Document Your History of Employment - Get together verification of your employment from at least a few years if possible. The longer you can show that you have been steadily employed, the better. The easiest way to show employment is to gather pay stubs from past and current employers. You may even want to ask your employers for letters of recommendation indicating that you are a hard worker and a responsible individual.

Consider Applying for Your Financing From Your Bank
If you have a bank account, and your bank offers auto loan financing, communicate with them your needs. The fact that a relationship already exists is to your benefit since they can easily determine your potentials as a client of their financing by analyzing your current and past account activity with them.

Find a Co-Signer
Even if you are able contribute a solid down payment, show a strong employment history, an ability to maintain a healthy checking account and pay your bills on time, it may not be enough for some lenders to issue an approval. They may require that you have someone with an established credit history co-sign your loan with you. Having a co-signer will offer the lender more guarantee of the monies being lent since not only a person with no credit history is being held responsible but instead also someone with a strong credit rating. So, if you are late on a payment, your credit rating will be negatively effected as will the person's that has cosigned for you. And if a scenario arises that equals you not paying your loan, not only will both of your credit ratings be even more seriously impacted than a late payment, the person that has co-signed for you will be responsible for payments of your loan.

Finding someone willing to be co-signer can also be difficult. The most obvious place to begin your search is friends and relatives. When approaching a potential cosigner, it is important that you are prepared to show them your worth. You may want to gather all the paperwork listed above and also detail them on your budget and monthly plan for paying your auto loan. You really will need to be serious about your intent when utilizing a cosigner. You don't want to jeopardize your relationship with that person as a result of your irresponsibility.

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