If you are an average person seeking a loan, then you have less to worry about. You probably have a good credit score and have a good lender who is ready to approve you quickly. The problem occurs when you either have bad credit or no credit at all. Even with a low score, one can possibly find a borrowing solution with a bit of an effort but what about having no credit at all?
Understanding No Credit
Bad credit means that your credit report has been graded poorly. It means you still have a history of borrowing money or paying bills. It is just not ideal. On the other hand, no credit means that you have no such history at all.
With no credit, lenders have zero information to determine if you are responsible enough and have the ability to pay back borrowed money. Major financial institutions such as banks won’t take the risk of lending money to a person with no financial history.
Read More: How Can I Get A 5000 Loan With No Credit?
If you have no credit, it does not mean you can’t have an urgent need for money. Unexpected expenses can happen for anybody. Besides, you must start building your credit from somewhere and getting approved is a starting point.
There are certain financial institutions that are willing to assist people with no financial history at all. For example, credit unions. These are like commercial banks but with a different approval system. Although, credit unions will need to perform a thorough background check.
After all, they need some sort of collateral to reduce the risk. But all this process can take considerable time. Therefore, it becomes non-feasible if you want quick money. On the other hand, it is also not convenient because you won’t be able to borrow a large sum of money.
Where To Apply For Loans?
To get a better deal while having no credit, you should try direct lenders. These companies are easier to find and most of them even work entirely online. You can dig up much information on them through their websites.
The question is how direct lenders make it possible for no credit holders to get the money. These companies are simply willing to give you a chance and help you with your financial emergency.
If you have a vehicle or jewelry you may use it as the collateral. If this situation is not workable for you, then the direct lenders can find an alternate solution for you. All you need is to find one that is willing to listen to your financial problems and determine a possible solution.
Finding a Lender
Simply run an online search and shortlist a few no credit direct lenders. Compare them based on what information you find on their websites. Finalize the one that seems most suitable for what you are seeking.
It is important that you build a credit score if you want to save yourself trouble in the future. And it should be good. Aim for at least 680 and more because this is considered a good score. If you can manage a 700 and more, that is considered excellent.
Read More: Which Loan Company Is The Best For Bad Credit?