Getting a loan for the first time can be frustrating. This is because most lenders operate on behavioral scoring loan appraisal system that studies your history and peg your loan limit to your credit score. This form of underwriting is important as it curbs loss of revenue due to credit risks. This explains why most financial institutions would be shy from being your first lender. They don’t have any of your credit history. Does this mean that you will not get any loan if you have no credit history? No, you simply need to learn how to avail of no credit history loans.
Taking out a loan with no credit history
1. Request a friend or family member to list you on their credit card as an authorized user
This process is easy as it doesn’t approval from the credit card company. The primary credit card holder simply adds your name to his credit account as an authorized user. As a result, you will be issued with a credit card with your name embedded on it. This way positive credit reports will be submitted to the credit reference bureau every time you use the card. This will boost your credit limit and give you access to loan facilities.
2. Ask a friend or family to co-sign
This is one of the best ways of how to avail of no credit history loans. Simply request someone who has good credit ratings to co-sign for a loan in order to boost your chances of qualifying. Getting this person will not be easy because the loan will bind him legally. This means that, if you happen to fail to pay your loan installments his credit line gets smudged. Therefore, the person must be able to trust you enough to co-sign a loan with you.
3. Apply for a secured credit card
In this case, you will make an application to the credit card issuer. You will be required to bank a security deposit that will match your credit limit. In most cases the deposit could average $300 to $500. This deposit will act as security against your credit card line. This way, you will be able to build your credit history as you use the credit card.This will open doors for you to access loans with high credit limits.
In summary, you do not have to worry on how to avail of no credit history loans anymore. We have noted that many lenders avoid issuing loans to first timers. Therefore, it is important that you use any of the above-suggested methods to boost your credit history. Little by little your credit score will grow, and you will be able to access loans with a high credit limit.
You can also consider payday loans and get a loan with no credit history.