Having a low credit score or no credit is frustrating as it limits your options and sometimes makes it impossible to get a loan. But there are ways you can do to work around it. All you need is to research the available options you’ve got and make the decision on how you will manage it in the long run. Having no credit record might be useful for you in some ways. You have a clear history, and at least it will be favorable once you apply.
Here are ten easy ways you can get a loan if you have no credit history:
A co-signer or a guarantor with excellent credit history can be a big help as they will provide you the security of availing loans from lenders. Trust is a common factor here as this involves the same responsibility of both. Though the co-signer has no intention to make any payments, they commit to taking responsibility if the borrower fails to pay.
There are a lot of lenders who specialize in no credit options. Compare their services to avail the best choice and make sure to steer away from those with massive payments and charges. It will also help if you avoid those scams like upfront fees and those that will only take advantage of your desperate situation.
Another way of building a good credit and payment history is to have a credit builder loan. Different from regular or standard loans, this type goes into your savings or cash deposit. The lender helps you in providing enough cash in case you purchase as they act as the loan collateral.
Thin-file borrowers are those with limited credit histories. The cardholder has a cash deposit which sets its coverage. The cash deposit lessens the risk to the lender. People with bad credit history usually choose this. It provides a useful reference for the lenders on the creation of your payment history.
Sometimes, credit history does not accurately track or record financial accountability. Some lenders consider alternative data as an important factor in approving your loan. Your financial behavior is vital to your chances of lenders on their decisions.
When you purchase credit, your downpayment plays an important factor. A higher downpayment reduces the amount that you are going to borrow. The risk is much lower as the possibility of you defaulting later is seen as a guarantee.
This involves a lot of extensive paperwork and evaluation, but if your financial record is clean, your chances of getting approval will be very high. The lender will review your application with your other supporting documents guarantees your ability to repay your loans.
This allows you to avail credit to a person or a group instead of lending through online websites. They choose the borrowers after reviewing the list that the borrower posts on their website. They also take into consideration the certifications of your history. Lower interest attracts people already with bad credits on availing.
One of the easiest ways to get a loan is through the people around you. Approval and terms are far different from lending companies in comparison. It is also a business deal as the process of evaluation and qualification is less, but even if it is a relative or friend, avoid conflict by paying on time so that you won’t jeopardize your relationship with them.
You should get a written contract or proper documents, and there should be a record stating the amount, interest rates, payment terms, and the aftermath in case you fail to pay on time.
One way of building good credit is to become an authorized user of credit cards. If the owner of the account is a good payer, then it will reflect on you as you are also an authorized user. Some creditors report late payments, and this may also affect your credibility.
Though living without debt is the best option, sometimes needs arise that are more than our financial standing can handle. It’s not a crime to take out a loan; make sure that you understand what you are getting yourself into.