Introduction
This does not have to the case for you, instead you can search for lenders that specifically offer loans to those with no credit history or poor credit history. These loans are ideal for someone who is just starting out with building their credit history. When searching for loans such as these, keep in mind that these are different than what people would normally apply for. These loans are great for people are unable to receive financial help from a regular lender. There are numerous loan brokers that can help you find a new lender that will accept your lack of a credit score.
Minimum Credit Score
One of the first things you should do is check what credit score is needed as a minimum. Even though you might never have had a loan, the credit reporting agencies can still have information about you. Instead, it is a good idea to check if you currently have a credit score and what it might be. Then you will know what loan programs you are able to apply for and if you would initially qualify. Therefore, no credit history does not mean you will not qualify for a loan.
Check Lenders
To increase your chances of getting a loan, you should think about ways to rectify this. This can be done by looking for lenders that are willing to give you a loan even though you do not have credit. These lenders will differ from the regular lenders in the amount you can borrow, the interest rate charged and if a deposit is required. Some lenders will give you a loan if you have no credit history, but are willing to pay a higher interest rate. You are considered to be a higher risk, so these lenders justify it with a higher interest payment. However, be careful of lenders that charge extortionate rates that leave you paying back almost 100 percent of the loan amount you borrowed.
Tips
As your situation is having no credit history, then it is also possible to find lenders that require a deposit. By making you pay a deposit, the lender is able to use the money you give in the beginning as a guarantee in case you can’t repay the loan. This situation helps you in two ways as you are assured that your deposit can help you if you do get into financial trouble. In the second instance, you are able to build a credit history just by placing a deposit down. The deposit you will have to give will vary with each lender, so it is suggested that you check this before applying for a loan. Remember that with no credit history you are limited in the loans you can apply for. You will also be limited in the loan amounts you can receive. Even though you might request a certain amount as a loan, the lender is not obliged to give this amount. In most cases, someone with no credit history will usually receive the minimum loan amount until the lender can see you can make the repayments.
