A no credit auto loan is usually offered at a higher interest rate than an auto loan for those with already established, good credit. But this can be an excellent way for young drivers with no previous credit history to establish credit in their name and build a good credit score. If you pay off your no credit auto loan in a timely manner, you will build upon your credit score, thus enabling you to have more borrowing power. Generally, a no credit auto loan is a short term loan offered by some banks and financial institutions that deal with sub prime lending. Just because you have no credit is no reason to think that you cannot afford to buy a car. You can apply for a no credit auto loan, have the car you want and establish credit in your name all at the same time.
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