Man with no credit sitting at the desk and looking over his bills

Can I Get a Loan Without Any Credit?

Can a borrower get a loan without any credit? The answer is yes. If a borrower is in need of money, he can still get a loan even without credit.

Your credit score is a great tool to help you access cash. It shows lenders that you’re trustworthy, and that you can repay your debts responsibly. Your credit score can affect how much money lenders are willing to loan you, as well as the terms of your loan. Those who have a higher credit score may get better interest rates, for example. Having a credit score, and a good one at that, can go a long way to securing a good loan. 

So, is it possible to get a loan without a credit score? The answer is it depends. Your credit score is based on your credit history. So, if you have no score at all, that means that you haven’t even applied for credit before. If you’re trying to get a home loan without any history, for example, you’re not going to have much luck finding a lender. Home loans are a significant responsibility, so there are certain standards that banks and lenders look for. However, if you’re seeking a small personal loan, finding financing can be possible. Just keep in mind that your loan will likely be small and may have some restrictions or other compromises to make up for your lack of credit. 

Getting a Loan Without Credit

If you have no credit history whatsoever, you’ll have to do some research to find lenders who will help you. Getting a loan without credit history might mean you have to make some compromises. For example, you may find yourself with a much higher interest rate, or a much lower loan amount. 

You may also be able to get something called a secured loan. A secured loan is a loan that is backed up by something of yours with value. For example, you may offer something you own as collateral for the loan, like a car or other high-value items. Just be sure that you can pay your loan back—offering your car as collateral means that if you can’t pay the loan, the lender is entitled to your car. 

Tips for Getting a Loan Without Credit

If you’re interested in a loan and don’t yet have a credit history, or if you just want some better prospects, you have options! You don’t just have to opt for high-interest loans, either. Here are some tips to get you started. 

1. Get a Co-Signor

If, for example, you’d like to get a loan for your first car, a co-signer can come in handy. Ideally, a co-signer will have a good credit score and is willing to apply for the loan with you. When they do this, you get to benefit from their credit history. This works, because the co-signer effectively agrees to be responsible for the loan as well. This doesn’t mean they have to make all the payments; however, they will be on the hook if you don’t make payments on time. Having someone co-sign on your loan is a great show of trust because your ability to repay the loan affects their score as well as yours. A parent or other relative can be a good co-signer if you decide to go that route to strengthen your loan application. 

2. Spend Time on Your Score

In many cases, you can build your credit faster than you think. If you can wait a few months to a year to take a personal loan, depending on your goals, it’s worth building your credit. You can do this in a number of ways, even with no credit history. Getting a secured credit card, for example, can give you a small amount of money to work with. Your credit line is secured with a cash deposit, usually a few hundred dollars, to act as “insurance.” If you’d rather not use a secured card, you can also open a student credit card or a low-limit card that doesn’t have rigid credit qualifications. 

Once you’ve opened an account, it’s important to use it. The credit bureaus look at your ability to manage debt when calculating your score. Making on-time monthly payments and keeping your balance low is going to be the most effective for you in the long run. As your credit card company understands your habits better, they may even increase your credit limit, which improves your score (as long as you don’t use it up). 

The best time to start working on your credit is now, so whether you’re pursuing a loan or starting smaller, your choices can help you improve your financial future. 

At Jora Credit we consider more than just your credit score. See if you qualify today by submitting an application here.

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