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Step 1
Establish credit. It is actually harder to try and get a loan with no credit than it is to get a loan with bad credit. Sounds backwards, right? It is, but luckily, credit is fairly easy to build. To build credit for a car loan, open a credit card, and make occasional purchases that you can quickly (by the end of the month) pay off. This will build your credit score, and your credit history, making you eligible for car loan rates that are a real steal.
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Step 2
Always, always pay your bills on time. If you are taking out a car loan, you will be making monthly payments to that debt. Prove that you are capable by making payments on time for all of your bills; from water bills, phone bills, and more.
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Step 3
Keep lines of credit open and with a low balance. If you have a couple of credit cards with large outstanding balances, try to divide them so that there is not a large balance on one and a minimal amount on the other. Though the sum of the two might still be the same, having the divided amount on each card looks like a smaller outstanding balance and can make a real difference when trying to get approved for a car loan.
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Step 4
Shop around for car loan interest rates. Especially right now, there are some great deals on interest rates and also government tax breaks for buying a new car. When shopping for car loan rates, look into all of your options and utilize all of your resources; your credit score and your bank account will both benefit.
