Looking for your first car finance without a credit score? READ THIS!


SO you’re a new car buyer. Maybe you just got your license not long ago. Great! Getting your first car is a very exciting time. That means the freedom to go places and do whatever you want, whenever you want.


But for many people, especially young people who have never made a major purchase, getting a car is very difficult and maybe even confusing.


The good news is that it’s not that hard, you just have to approach it the right way. Read on below and we’ll explain how to go about getting your first car loan.





Getting your first car loan with no credit score – made easy!

A common misconception many people have is that you need to have a credit score or credit history to get a loan. But this is not necessarily the case!

In comparison to getting a loan, getting a credit card or a bank account is quite easy. This is because to some degree it places less emphasis on your credit score (or lack of) than getting a loan does. This is because traditional financial institutions, otherwise known as banks, look into your financial history by checking your credit file.

Many people often get to their 30’s and have never had to hold any line of credit before needing to get finance for a big purchase like a mortgage, personal loan, or car loan. This lack of credit history, even for simple things like phone plans, car loans or personal loans, means there is a lack of information in your credit file. We’ll talk about why this is important below.



Do I have to have a credit file or credit history to apply for a loan?


The short answer is….. no! Of course you can apply for a loan. But getting approved is another question.


Most lenders have similar lending criteria. They may also have their own extra criteria relating to the kind of loans they prefer to issue.


These are the things that all lenders will be looking for when they assess your suitability for a loan.


  • Whether you have some kind of income that will allow you to make your loan repayments, whether they are weekly, fortnightly or monthly, without putting you into a financially situation.
  • If you’ve had any other regular financial commitments or bills to pay, like a phone bill, electricity, rent, electronics lease or anything else similar.
  • If you have had any kind of finance, lease, or bill, whether you’ve been responsible with your payments and made them on time and reliably.


It should be pretty understandable that lenders want to loan to people who are less risky and will be more likely to repay their loan.


Remember that having a low credit score, history of not making your repayments, or making late repayments, does look a lot worse than simply having any credit history. An empty credit history is like a clean slate. Whereas a credit history of being irresponsible or relying on credit to make ends meet is a clear indicator that there may be difficulty with the loan as there is high risk involved.


The other major part to remember is that risky loans are loans that attract higher interest rates. The higher the interest rate the more extra money you’ll have to re-pay on top of the borrowed amount. If you want to save money on your finance throughout your life then you should aim to have the best credit score possible.




What Can I do to help my chances of getting my first loan approved?


If you don’t have a credit score or any kind of financial history then it might be time to get one!


There are a few ways to go about this, but one easy way to get started is to get some bills. We don’t mean you should just go wild with your spending. But you should carefully build up some financial responsibility.


Easy things like a phone bill are a good start.  Then maybe consider an affordable credit card with a low interest rate and small limit.


When used correctly credit cards can be a good tool to have as they can be used for many things. Of course you should try to avoid using it for big purchases unless you can pay the money back quickly, which will save you money on interest. But using a credit card and being sure to pay it back quickly and reliably will make you look like you are able to successfully manage your finances.










So, if you haven’t got a credit history it’s time to start building!


The easiest solution to not having any credit score is simply to get one started building one. Start with simple things like a phone contract or utilities bill, and/or rent. Then move on to using credit cards responsibly.


Once you’ve learnt how to responsibly manage your repayments then you’ll you’ll have a good foundation to continue building your good credit history.


Always remember that a good credit history is worth growing and maintaining. Getting approved for a loan will be easier together with better deals and lower interest rates.


But this doesn’t mean you’ll be always have a tonne of difficulty getting approved. Working with the right finance like Hoolu broker is can go a long way to boosting your chances of success. This should of course be combined with your own proactive approach to approving your credit score.


If you want to learn more about improving your credit score you can read this article – You Can Raise Your Credit Score – NOW!





Can you wait? Consider the timing of your application.


If you’re a young person who’s doing young person things and are working part-time or casually then planning your time to apply can make a lot of sense. You ideally want your application to be as strong as possible.


But if you can’t or don’t want to wait that’s perfectly understandable. Plenty of people need transport for things like getting to work, shopping, socialising and any other reason. If you need to get a car now then read on and we’ll give you a few extra tips that can make the difference to getting approved for a car loan with no credit or a low credit score.




How do I get approved for a loan? It’s as easy as fitting into the lending criteria.


As we’ve spoken about before, most lenders have similar lending criteria or terms and conditions that an applicant must meet to be granted a loan. These criteria might vary between lenders but they are generally the same in that they want to know you have enough of a steady income that will allow you to comfortably and regularly make your repayments.


The same steps you need to take to start building your credit score are the same steps that you should start taking to boost your chances of success when submitting your first loan application. Follow this list of recommendations to get started:


  • You’ll need a regular form of income. Whether it’s part time work, casual work, certain kinds of Centrelink payments, the pension, or anything else. It just has to be regular and visible in your bank statements. Even 3-6 months in one job is enough to have a positive effect on your application.
  • This income will need to be large enough to allow you to cover your repayments without putting you into financial hardship. If this isn’t for you then working on increasing your income and maintaining a steady income are worth spending time on.
  • Obviously you want to avoid any dishonour fees, defaults on repayments, late payments, or failed payments. If you have any of these you will want to spend some time making things right on your record. This means on-time payments and being sure that they’re all covered.
  • Savings – are you putting some money away? You should aim to be able to show you’re able to save some of your income.




You’re most likely to get approved for a secured car loan.


We speak a lot about secured car loans on the Hoolu Blog about what a secured loan is and why they are preferred by many. In short, secured loans are easier to get because they have security on the loan.


The security is of course the item the car that you’re going to buy with the loan. As part of the loan’s terms and conditions you agree that the car itself can be repossessed in the event that you fail to make your loan repayments. This of course makes it less risky for the lender to offer you the loan and therefore you’re more likely to be offered this arrangement by far.


Another option is of course a personal loan, but personal loans are not without their disadvantages. They can be of higher interest because they’re intended to be paid back more quickly. They might also be for a much smaller amount than you’d be offered for a secured loan. Plus, you’ll still have to offer up some kind of security, which can be any asset of equal or greater value.


But we actually recommend that everyone should avoid personal loans altogether. They can be negative to your credit score and financial health in a number of ways.


Many people often rely on fast cash or payday loans without thinking about the long term impacts on their credit file. Essentially, when you have a history of using fast cash or payday loans to make ends meet you are showing the lender that you can’t manage your finances properly or do not have sufficient income to match your spending. They can also be unnecessarily expensive and so we believe that they are not worth it. As with most things in life you’re better off to start out on the right foot.




Your application looks good, but you want how much?!


Congratulations, you’ve made it this far and got your application in order and you know that getting a loan is possible. But you’ve applied for $50,000 with an income of $5,000 from working at a casual job without any savings. That’s a lot of money!


Realistically you’re probably not going to be granted this loan because lenders have certain standards placed on them relating to responsible lending and financial prudence. Doing a little bit of homework and figuring out what kind of loan you’re eligible for can be the difference between getting a loan or not.


Alternatively  you can ask us before you send your apply for a loan so we can advise you on what would be the best for you! Just fill out the form below or give us a call.






Our customers love working with us because we make better loans possible.


We don’t believe in one-size-fits-all loans! It’s our job to match you with the better loan options that suit your situation. We also give you the power to choose what suits you, too.


for a secured bad credit car loan can take a lot of time and be stressful. We can share our expertise with you by making the entire process as simple and painless as possible. After all – we are THE MASTERS of bad credit car finance in Australia. Yep, nobody is better. It’s true.


Hoolu is happy to work with you to get your first loan approved! Get in touch with us today – click here to visit our contact page. Or fill out the form below!






Check out our last article to learn how to get approved for a secured loan with a low credit score!



Getting A Car Loan: On Centrelink Or As A Pensioner – Made Easy!







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