Having bad credit or no credit can really put a damper on getting a loan. Most traditional loan companies will deny you for credit almost immediately because having no credit is like having bad credit. You’re not stuck without any options, though.
What most people with no credit or bad credit don’t know is that there are several ways for them to still get money when they need it the most. Some of these options will include a high annual percentage rate (APR), which means higher interest rates. However, as a beginner with no credit, these will be the best options available to you.
One of the newer financing options available is peer-to-peer lending or referred to many as person-to-person lending. This allows you, the borrower, to request a loan through an individual rather than an institution. Most of the individuals post their loan amounts on a board with a list of criteria (what they want in return). Once you apply, the lender will look through all of the applications and determine which investment is better for them, selecting a winner.
While your credit score is still a determining factor in the individuals’ decision, they will be able to thoroughly scan it and make a decision on whether they believe you are a trustworthy borrower. Those with no credit have more flexibility to get loans through individuals since they may not be denied because of their lack of credit history. In addition, most of the APR rates are lower than traditional loans.
Ask a Co-Signer to Help You
One of the magic of credit and loan is that if you have no credit or bad credit, you can get a cosigner. This cosigner should be someone who has good credit and can stand a chance of passing the loan approval process. The cosigner agrees that if you don’t pay the balance, they may ask the cosigner to pay for any amount overdue. Keeping up with the payments afterward will give you an installment loan and a history of payments, giving you a massive credit boost.
Visit Your Local Credit Union
Credit Unions are institutions that are located only in your local area. Many of these businesses were opened and operated through individuals who want to help their local community. Many of these credit unions may overlook your lack of credit history and extend a loan to you based on your character and judging if you’ll repay. If you have good ties with your community or your job banks with a credit union, this will be a great opportunity to get credit cards or loans quickly.
Even with No Credit, You Have Options
Even if you have no credit, you have multiple options available to you for getting money fast. Even though you may have to deal with slightly higher APR rates with some of these versus a standard institution, these may be the only options you have available. Use these wisely and you could build up a good credit score in no time.