MADISON, Wis. (8/20/15)--Do your homework, tell your story and negotiate in your best interests. That’s the advice Mike Schenk, CUNA vice president of economics and statistics, offered car buyers with no credit history for a recent CreditCards.com article.
Schenk advised readers to begin the process by making a list of potential lenders.
Once those potential lenders are identified, the borrower should start asking questions: Do they do any manual underwriting for auto loans? Can they make loans to someone with no score? If so, how does that process work?
The borrower must learn what the lender will do that differs from the normal lending process to help him or her qualify for a loan without a credit history.
Then the borrower must be able to demonstrate that he or she is a safe risk. Among the factors that can work in the borrower’s favor: a record of bills paid on time, a steady income, a healthy down payment and sufficient disposable income to repay a new loan.
"You've got to be prepared to tell your story and support your argument," Schenk told CreditCards.com. "Ultimately what all lenders want is to be paid back, preferably on time."
Borrowers without a credit score may also be asked to put down a larger lump sum or pay a higher interest rate. Schenk’s advice? Negotiate. "Don't let that scare you off," he said.