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No Credit? No Problem! How to Get a Loan with No Credit


On a scale from 300 to 850, the average credit score in America is 695. Of course, the higher your credit score, the better the chances you have to get approved for loans with the best rates.

But 14% of the U.S. population has no credit and is what is called “credit invisible.” Thousands more have poor credit.

So how can you get a loan with no credit? Read on to find out.

1. Find the Right Lender

It can be difficult to get a loan with no credit. But there are lenders out there who specialize in giving loans to people with poor, little, or no credit.

You’ll have to be careful when choosing a lender, as there are many unreputable lenders who prey on people to trap them into debt they can never repay. (More on that later.)

Yet, there are good lenders who give out no credit personal loans and no credit car loans.

Remember, any loan you get should help you build your credit. Always make sure you read the fine print and understand the terms and conditions of the loan. Be sure you can pay the loan on time and in full.

2. Apply for a Loan With a Co-Signer

Another way that you can get approved for a loan with no credit is to apply with a co-signer.

A co-signer is a person who is willing to be responsible for your loan if you can’t make your payments. Look for a family member or friend who has a good credit rating for your best chances of getting approved.

Just keep in mind that your relationship with your co-signer is at stake. If you default on the loan, your relationship could be permanently damaged beyond repair.

3. Become an Authorized Credit Card User

Another way that you can get access to funds is to become an authorized user on someone’s credit card.

You may have a close friend or family member with good credit management skills who can help you. Ask that person to add you as an authorized user on their credit card account.

Have a frank discussion with this person and make sure you both agree on how much you can spend and when you will pay off your portion of the balance in full.

The good thing about being an authorized user is that your activity will likely make it onto your credit report. If your goal is to build up your credit score, have the primary cardholder ask if authorized user account information is reported to the major credit bureaus.

Keep in mind that if the primary account holder is late with payments or maxes the card, it can negatively affect you as well.

4. Work with an Online Lender

Whether you are looking for a car loan or a personal loan, you may have better luck if you work with an online lender.

Online lenders are typically more flexible than traditional banks. That means they are more willing to work with a wider range of customers.

And, because these online lenders don’t have the overhead costs of maintaining a physical location, they often can offer you better rates and terms.

5. Put Down a Bigger Down Payment on Your Car

If you need a car loan, one of the best ways to get approved is to put down a larger down payment.

A large down payment lowers your monthly car payments as well as your overall loan amount. That makes you more likely to be approved.

Also, having a sizable down payment shows the lender that you are a credible person who can manage their money.

6. Beware of Predatory Lenders

Earlier we talked about choosing the right lender. This boils down to reviewing the terms and conditions with a careful eye.

Some lenders offer loans with high annual interest rates, even as high as 350%! Many of these lenders offer short terms under one month.

High rates and short terms make for a deadly combination. These loans are designed to trap borrowers into a cycle of debt because the borrowers need to extend the loan (with a fee) to have more time to pay.

But the fees add up so that you are only ever paying the interest, not the principal balance.

While there are many reputable lenders out there, make sure to stay away from ones who are looking for people to trap.

7. Work on Improving Your Credit

Though there are plenty of options for people with poor or no credit, it’s wise to be actively taking steps to build your credit.

Here are a few simple things you can do to help your credit climb higher.

Pay on Time

One of the biggest influences on your credit history is your payment history. Become the type of person who always pays his or her bills on time, every time. This includes internet and phone bills, electricity, and so on.

Late payments and those sent to collections can stay on your credit report for up to seven years! Pay on time to boost your credit score.

You can schedule pre-payments through your banking institution, or you can keep track of your due dates on your calendar.

Don’t Max out Your Card

If you have a credit card, never use the full limit on the card. Maxing out your credit card hurts your credit score.

The less you charge to your credit card, the better. The balance on your monthly statements is sent to the credit bureaus. And this balance will affect your overall credit score.

If you can, pay the balance off in full each month. If you can’t, keep the balance well under the limit.

Bottom Line on How to Get a Loan with No Credit

Thanks for reading. We hope this article on how to get a loan with no credit has given you some useful information.

Remember, loans are useful tools to get access to funds. But they can also help you build your credit if you use them wisely.

Check out our other blog posts for tips on finances, business, and career.

So, what do you think ?