It’s the perfect scenario – you’ve passed your driving test and have been saving to buy your dream car for a long time. However, before you sign that dotted line on your auto loan agreement, there is an element of doubt in the air; due to the fact that you have no credit history. Your credit history can be a deciding factor in whether your loan is approved or rejected. Many times, however, there is simply not enough credit history to begin with.

There can be many reasons why a person does not have a credit history. Generally, college graduates and teens have no credit history because until now they had no chance of establishing a credit history.

Another example of people with no credit history are recent immigrants who moved to a new country and have not applied for a car loan, as they mostly prefer to transact in cash. However, applying for a loan can be a good thing, especially when you ask for it wisely and sincerely pay off your debt within a certain time frame. Plus, a car loan means you can save the amount equivalent to a car and invest it elsewhere. If you just graduated from college or moved to another country, the amount you save can be of great help to you.

So how can you qualify for a car loan with no credit history?

· Find a co-signer

A co-signer is typically someone who adds your name to your loan, thus agreeing to repay the loan on your behalf, if you default on the loan. As a first-time car buyer, a co-signer with a good credit rating can be an important factor in getting your loan approved.

The only measure to see if you can pay your auto loan is to maintain a good credit history. However, in the absence of a credit history, a co-singer with a good record can act as backup if you are unable to repay your loan. Therefore, having a co-signer instills a sense of security in your car lender and they will be more willing to approve you for the loan.

· Increase the amount of the down payment

An auto lender is more likely to approve your auto loan if you are willing to pay a large down payment before availing of the auto loan. Twenty percent of the price of the car is generally considered a good amount for a down payment. However, if you can pay more than the usual amount in your down payment, you are more likely to retire on your car loan. The reason behind this is that a hefty down payment reduces the total loan amount and the auto lender is guaranteed for your payments.

· Find a suitable loan

Different auto lenders may offer different auto loan programs depending on your situation. There may be some loan programs tailored to your specifications, for example; some may be designed for college graduates, while others may be designed for residents new to the country. Be on the lookout for accommodations that may fit into your loan program.

Being a first time car buyer with no credit history is not that difficult. There are many auto lenders who provide auto loans to people with no credit history. Keep the above points in mind, and soon you will be closing your first car loan deal for your new car.