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Loans For People With No Credit History

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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.

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