Introduction
One's credit history is of great importance if he or she wants to get a loan from the bank or from other financial institutions. It gives the lenders information on how prompt you are at paying your debts and handling credit. This helps them decide whether they can trust you with their money or not. A good credit history means you are credit worthy, while a bad credit history means you are most likely to default loan repayment and cause the lender's financial loss. For its part, zero credit history means you have never borrowed a loan before and the lenders have no basis for judging how responsible you are with credit. In this case, some lenders will not approve your loan request.
History
A zero credit history should not be a hindrance to you obtaining loans from financial institutions; there are lenders who are willing to give money in spite of a bad credit or zero credit status. The first tool you must be armed with when applying for a loan on a zero credit history is a credit report. A credit report indicates your debt amount and credit habits. It is advisable to get a credit report even if you have never borrowed a loan before. You can always get a free report from Annual Credit Report.
After that, it is important to present all of your relevant financial documents to the lenders. Remember to include among these your latest paycheck stub and bank statements. This information helps lenders verify your credibility before approving your loan request. You stand a better chance of getting a loan with zero credit history if you have stable employment and a regular income.
Features
Another sure way of getting a zero credit loan is by joining a credit union. Banks and credit unions usually give loans to their long-term customers. This is on conditions that your account is in good standing and you have got no bounced checks or overdraft incidents. Besides, loan officers get to advise you on what to do to get loans.
After you have produced your financial document and credit report, you need to get a co-signer. A co-signer is sometimes referred to as a guarantor. He or she makes a pledge to assume repayment of the loan incase you default. They are, therefore, supposed to display a good credit history and ownership of satisfactory financial assets to enable you be given a zero credit loan.
Tips and comments
The final thing is that you should consider applying for a secured loan to increase your chances of getting a zero credit loan. A secured loan is a loan with collateral, for example, a house or a machine. The value of the collateral should match the loan balance.
To sum it all up, if you are considering applying for a zero credit loan, you can talk to your banker and brief him or her on your wish to obtain a loan. You can ask them how you can meet their standards for loan. Better still, you can start building a credit history for yourself in simple ways like getting a credit card and using it to buy commodities and then paying for them at the end of the month.
