Credit history

Can I Get a Car Loan with No Credit History?

Q: I recently found a car I really liked and could afford, however, when auto dealer at Toyota wanted to run my credit, (over phone, by the way) with my approval, he called back and said, no credit history is coming up on all three reports…I just pulled all three credit history reports with scores, with no problem! Is this normal for a car dealership? Is it possible we can find out who they used to pull my credit history?

A: To answer your question, no, it’s definitely not normal for a car dealer to pull your credit report and then find “no history” at all if you’ve clearly established credit over the years.

You can certainly ask the rep from the car dealer what credit bureau he checked; he’ll probably be willing to tell you this information.

The difference between a thin credit file and no credit history

But I think you need to clarify with this car salesman whether he’s suggesting you have a “thin” credit file or “no credit” showing because you supposedly haven’t had past credit … or if he means that he wasn’t able to find you at all based on the information he has.
A person with “no credit” or “thin credit” is usually someone who only recently got credit, or an individual who has lived outside of the credit mainstream.
If you only recently obtained credit, such as a credit card, it can take 60 to 90 days for that to appear in your credit files.
Those who operate outside the credit mainstream don’t have traditional banking relationships. So they often have never had, say, a mortgage or an auto loan.
As a result, both of these scenarios can produce a “thin” credit file or “no credit” history.
However, if he’s not suggesting that you have “thin” credit, this incident may have been caused by an error at some point in this whole process that made your credit files somehow unable to be retrieved.
You said that you did this over the phone.  Is it possible that the car salesman made a mistake in writing down your social security number or the correct spelling of your name, and that’s why he wasn’t able to find anything?
If he erroneously inputted that data or some other identifying information about you, such as your exact home address, that could also explain why he couldn’t find your credit files.
As for you, did you get your credit reports and credit scores from AnnualCreditReport.com, from myFICO.com, or from some other source?
Regardless of the source, you might download a PDF of those credit reports/credits scores and supply them to the car dealership.

Why a soft pull won’t impact your credit score

That’s what I recommend doing anyway since when you request your own credit report it’s a “soft” pull and it doesn’t impact your credit score.
However, when a car dealer (or any potential creditor) pulls your credit report, it’s a “hard” pull and it does impact your credit rating because a credit “inquiry” is generated.
An inquiry stays on your credit report for two years, and it counts against you – for the purpose of calculating your FICO credit score – for one year.
I wouldn’t suggest sending your credit info over email or via computer upload unless you are 100% sure of who you’re talking to and you are 100% confident that it’s a safe, secure online system.
Instead, take the credit reports to the car dealer and show them to the right person. If they’re offering you financing, they’ll want to know your credit history and/or credit scores.
So this information should satisfy them.
I hope this feedback is helpful to you.  Good luck in your car hunting!
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