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When you don't have a credit score, your borrowing options are slightly different than those for people with bad credit. Lenders that are willing to work with people who have no credit score often run a hard check on your cosigner's credit.
However, no-credit-check lenders tend to assume that you have bad credit rather than no credit. No-credit-check loans can be more expensive than other options for borrowers with bad credit. Read our comprehensive guide to bad-credit loans to find options that fit your specific financial circumstances.
The dangers of no-credit-check loans
Select your cosigner's credit score range to find the best loan option.
Yes, but it could take work to find a lender willing to work with you. You might also need to adjust your expectations if you're looking for, say, a large bank loan of $100,000.
With so many lending upstarts competing for your business, an online lender might be a good place to start, especially for smaller loans. Many of these lenders use new technologies and alternative sources of data to determine your creditworthiness. They believe a broader look at your income and financial habits can better predict your creditworthiness than merely relying on your credit score.
However, more traditional lenders — like banks and credit unions — are typically not willing to take on the risk of a borrower without a credit history. That's because your credit report reveals to your lender how you've handled debt in the past. With no credit history, you're considered a wild card. These lenders also consider your income, employment status and debt-to-income ratio when reviewing your application.
Despite lacking a comprehensive credit history, you'll find several options for getting your hands on a loan.
If you have a friend or relative with a strong credit history, consider asking if they'd be willing to cosign a personal loan. When you apply with a cosigner, your lender considers that person's credit history and employment status when determining approval, terms and conditions for a loan. Importantly, your cosigner is also responsible for paying off the loan if you default.
Don't confuse a cosigner with a coapplicant or a joint applicant. With a coapplicant or joint applicant, the lender considers both of your credit histories equally. So even if your coapplicant has excellent credit, you might not see approval or a competitive rate.
Don't have a cosigner? If you're new to this country or only recently turned 18, check out lenders that consider your education, your career path and other variables outside of your credit score. For example, the San Francisco-based lender Stilt specializes in loans for nonresidents also works with US citizens who don't have a credit history.
Students might also want to look into lenders specializing in personal loans for students, like Boro. These lenders consider factors that include your academic performance and earning potential.
Before applying with an alternative lender, make sure you meet its eligibility requirements. For instance, Stilt is available in 11 states only, and others may require a specific GPA or level of education to qualify.
Stilt personal loans
| Min. Loan Amount | $1,000 |
|---|---|
| Max. Loan Amount | $35,000 |
| APR | 7.99% to 15.99% |
| Interest Rate Type | Fixed |
| Minimum Loan Term | 6 months |
| Maximum Loan Term | 36 months |
| Turnaround Time | 2 to 3 business days |
Likely your least expensive option for borrowing money is requesting a personal loan from loved ones. Keep it informal, if you and your relatives have a close relationship.
Or use a service like Loanable to set interest rates and terms that result in a legally binding contract. That way, your relatives earn money on the interest, and you get a more competitive rate than you would with a traditional lender.
CDFIs are local banks or credit unions offering financing options to community members who have poor or no credit. Their goal is to provide an affordable source for funds in historically underserved communities.
Many offer loans that come in small amounts but at more competitive rates than you'd find with a short-term lender. For example, New York City's Spring Bank offers small-dollar loans to employees of local businesses with a fixed interest rate of 16% for everyone who gets approved.
Credit unions commit to reinvesting earnings to keep savings rates high and loan rates low. And they're often more likely to offer loan options to members with no credit history.
Members of federal credit unions might have access to affordable small-dollar loans, thanks to the National Credit Union Administration's Payday Alternative Loans (PALs) program. Many local credit unions offer similar products.
PALs are designed to help you develop healthy financial habits while taking advantage of strong terms and conditions you won't find with a payday loan:
Payday loans, title loans and other short-term loans should be reserved for financial emergencies only. They often come with APRs in the triple digits, and not all companies offering loans are legit.
Some short-term lenders require at least poor credit to qualify, so carefully read your lender's eligibility requirements before you apply.
Got bitcoin but no credit score? You might want to look into getting a loan backed by your cryptocurrency assets. These lenders typically don't rely on the conventional ways of evaluating your creditworthiness, so your lack of credit history might not be a problem. For example, BlockFi doesn't run hard pulls or soft credit checks when you apply.
But beware: Since crypto is a highly unstable form of currency, these loans can be risky. If the value of your coin drops enough, you could be forced to repay your loan in full with very little notice.
You'll have a leg up for approval on a competitive loan if you have a credit rating. If you don't need the funds right away, consider positioning yourself for stronger offers by building your credit score first.
While not impossible, getting a loan without a credit score can be tricky. If you have the time, consider building your credit score before you apply for a loan. You'll have more options and might see an easier application process, documentation requirements and stronger terms and conditions.
Learn more in our guide to personal loans, where you can also compare top lenders against your needs.
Your options are limited. If you're a student, look for lenders like Boro, that offer auto loans to students.
If you're a temporary resident or on a visa in the US, you may want to look into car loans for nonresidents. Otherwise, look for an auto lender that accepts cosigners.
Unfortunately, payday loans are typically your only option if you need money fast and don't have established credit. If you're prone to emergency expenses, you might want to consider joining a federal credit union so that you're eligible for a payday alternative loan — or PAL — in the future.
It depends on the lender. The US Department of Veteran Affairs doesn't set a credit score minimum for its home loans. However, many require a credit score of at least 500. Read our comprehensive guide to VA mortgages for details.
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