Loans For People With No Credit History
Students, immigrants and recently divorced or widowed women who have always obtained credit jointly with their husbands are amongst those people who find, that when it comes to getting a loan, having no credit history is almost as bad as having a bad credit history. For such people, getting credit may seem like a bit of a catch-22 situation. They can't get a loan without a credit history, yet they cannot establish a credit history without first getting access to credit. This may seem like an insurmountable problem, but by taking small steps you can overcome it and get a loan despite not having much of a credit history. It is a good idea to open a few smaller accounts in the process of building credit before applying for a larger loan. Your first step should be to apply for a small loan or a credit card. Usually most banks will extend such a loan to you as long as you can show that you have a steady source of income. In case you are unable to get a loan or credit card on your own, use the credit history of a family member or friend to leverage yourself into credit in your own name by asking them to co-sign for you. Another option is to go in for a secured credit card. As you repay your loan or pay your credit card bills on time, you establish a credit history. However, before you apply, make sure the bank reports your credit history to the credit bureaus. The process of establishing a credit history can take some time (anything from six months to one year). If you need a loan earlier, your best bet may be to approach a lender who specializes in loans for people with no credit history. Alternatively, you may want to go in for a collateralized or cosigned loan.