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First time loans with no credit history

5 minutes minutes read

You never know when you might need money, so sometimes you are forced to apply for a loan. What if you are new to credit though, and you are not able to access the most popular loans out there?

Keep reading this article to find out more about first time loans for people with no credit history.

Having no credit

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Your credit history and credit score are a good way to measure how you handle debt.

This information can be seen on your credit report, and your credit reports help scoring companies calculate your credit score.

If you are new to credit, you are unlikely to have credit history and a credit score. This makes it harder for financial institutions to approve applications for financial products such as loans.

Do not panic! This situation happens more often than you imagine. Just because you don’t have credit does not mean that you have bad credit.

You can be classified as someone without credit for many reasons:

  • No recent activity. It means that you have been inactive for more than 6 months.
  • Never applied for a financial product in the past. Someone that just moved to another country or is just new to credit.
  • Accounts were opened recently. New accounts can take up to six months to impact your history.
  • History not reported. There are different scoring models. Take a look if your scoring model is considering your credit activity.
  • Accounts are closed. Closing your accounts can make you unscoreable.

Personal loans

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You can get a personal loan in almost any financial institution. Recently, there are even some online lenders that offer personal loans that work faster and more smoothly than the process involved in a traditional financial institution.

These loans are easier to get because they are relatively smaller than any other type of loan. Personal loans can be unsecured or secured. When you get a secured loan, you will need to put collateral to get the loan.

You need to understand every aspect of the loan you are getting to avoid any future problems. High interest loans can be a future problem for you because your loan will end up being more expensive.

Loans for people with no credit

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Here is a list of some loans you can get if you have no credit history. 

  • Best Egg Personal Loans
Loan amount $2,000 – $50,000
APR 5.99% – 35.99%
Credit Score 700

This personal loan is accessible for most borrowers. You will know if you are approved within one business day. The term of the loan goes from 3 to 5 years and there are no prepayment penalties with this loan.  You have to keep in mind that they charge an origination fee that goes from 0.99% to 5.99%.

  • Upstart Personal Loans
Loan amount $1,000 – $50,000
APR 4.37% – 35.99%
Credit Score 580

This online lender lets you know if you are approved within one business day. Upstart has an origination fee and the term of the loan goes from three to five years.

  • Avant Personal Loans
Loan amount $2,000 – $35,000
APR 9.95% – 35.99%
Credit Score 550

Just like the other loans we have talked about, Avant informs you as soon as in one business day if you are approved. This loan also has an origination fee and the term of the loan can be anywhere between 2 and 5 years.

Building credit

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We have talked about different ways to build credit when you have no credit history.

Some of the easiest and most popular ways to build your credit are:

  • Rental payments: You can ask your landlord or go to a third party for your monthly rental payments to be considered in your credit reports.
  • Authorized user: By becoming an authorized user, the payment history, account information and anything related to the account will appear in your credit report.
  • Experian Boost: With Experian Boost you will get your phone bills, monthly services and some bills into your credit report.
  • Secured Credit Card: This type of credit card is easier to get because you give an initial security deposit.

Monitoring your credit

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Monitoring your credit is a must if you want a better financial life.

At Crediverso you can get your credit report for free. Just follow these steps:

  1. Login or create an account in our website
  2. Click on “Check your credit” 
  3. Click on “Check for free”
  4. Follow the steps and fill out the information required
  5. Get your credit report and advice on how to improve your credit score

Arturo Mendez

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