It isn’t easy to get credit without a credit history. This is because most lenders prefer to offer loans to borrowers with a history of paying their debts on time. However, having no credit score doesn’t mean that it’s impossible to get a car loan or that you have bad credit. Besides, most Canadians have blank credit reports. So, if you’re looking to get a car loan with no credit history in Canada, there is no need to worry.
Tips to Help You Get an Auto Loan With No Credit History
Major credit bureaus in Canada, such as TransUnion and Equifax, only create credit reports based on two-year activity. If you have no credit score or history, here are a few tips to help you get a car loan in Canada:
Organize Your Documents
Since you have no credit report, lenders examine other factors to determine your creditworthiness. This can include your living history to see if you were able to pay your rental costs, your employment history, to see proof of consistent income, your driving history, and bill payments to confirm your payment history. Lenders may also pull information from your bank accounts to see how you manage your money.
Consider Using a Co-signer
Consider finding a co-signer with a good credit score to increase your chances of getting the auto loan. Finding a family or friend with a good credit rating can give lenders confidence in giving you the loan because they can hold them accountable in case you’re unable to pay. You and the co-signer must understand the risks involved if you fail to pay the loan.
Consider Making a Down Payment
The less money you need from a lender, the better your chances of getting the loan. This is because you’ll owe the lender a lesser amount, which you’ll probably pay in a short period of time. So, the better if you can make a down payment, regardless of the amount.
Improve Your Credit Rating
If you plan to get an auto loan in a few months, consider signing up for a credit card that can help you establish a good credit score. You can also work with providers who specialize in building credit ratings through a personal loan. Consistent use of credit can help you get a good credit score, improving your eligibility for the loan. Consider asking for your own credit report from the various credit bureaus to help you constantly monitor it.
Contact DriveNation Today!
DriveNation is here to help you get a car loan, despite your credit file. Here, you get access to over 20 lenders that offer loans at fantastic interest rates. More so, they have credit-building programs to help you improve your credit rating, making your loan application successful. So, if you’re in Canada and looking to get a car loan with no credit history, please don’t hesitate to contact DriveNation today!