How Do I Get a Personal Loan With No Credit History?

It seems like the old vicious circle or Catch-22, you need a loan, but have no credit history, how can you build a credit history without taking out a loan?

You just go round and round and round.

It would seem that having no credit, is the same as having bad credit, it is difficult to get a loan.

However, there are some things you can do to improve your situation, and chances of being approved for a loan.

In addition, there are loans that do not rely on credit scores or credit history to be approved for the loan.

There are no real loans that do not do a credit check, but credit is not the sole basis for granting the loan.

Payday loans and guarantor loans are two of these types of loans.

They are based on affordability, having a bank account, working, and in the instance of a guarantor loan, having a guarantor, someone to sign to guarantee the loan.

But suppose you wish to get a loan without a guarantor, or need a personal loan for longer than just till your next payday, then what?

There are a few things as a first-time borrower you can do to establish a credit history, without the need of a guarantor.

Steps to Getting Your First Loan and Credit

One of the first things to do is to get on the Electoral Roll, this won’t get you credit, but when you apply for a loan, and begin to have a credit report, lenders use the roll to verify you are a real person, and that you live at the address you give to them.

This is a small but important step in beginning your journey in getting credit.

If you are a tenant paying rent, you can inquire with your landlord about getting on the Rental Exchange.

This is where your landlord would report your rental payments to a credit bureau, which in turn establishes a credit history for you. It also encourages tenants to pay their rent on time, which is good for landlords.

There also are credit builder credit cards available to borrowers with little or no credit. These credit cards have high interest rates, and usually begin with low credit limits, but they are a way to establish credit.

Pre-paid credit cards are also a way of building a credit history, but only if the card issuer reports to the credit bureaus. Many pre-paid cards do not report to the credit bureaus. So unless the account is reported, you do not get credit for it.

You can also open a savings account, show a regular pattern of savings, and then after a period of time, request a loan from the same bank. You can show them you have been saving money with regularity, and you also need to show you can afford the loan.

There are some new type of accounts to help people build credit. You commit to a set amount each month to pay into the account, and it gets reported to the credit bureaus, and in the end of the term, usually 12 months, you have some money saved.

If you have no credit and require a personal loan to buy a car, or a mortgage loan to buy a property, having a large deposit is very important, especially to get a loan without a guarantor.

The larger your deposit, the more likely you are to be approved for the loan.

To recap a few steps and pointers in getting a loan without having credit:

* Get on the electoral roll

* Open a savings account

* If renting, inquire with your landlord about the Rental Exchange

* Use a credit builder credit card

* Open a credit savings account which is reported to the credit bureaus

* For secure personal loans, have a large deposit

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