How Can You Get a Loan if You Don’t Have Any Credit History?

If you have never applied for a loan or you have never owned a credit card, the chances are that you have a thin active credit file – perhaps one too thin to be considered by traditional lenders as a viable candidate for a loan!

Although not having a credit history isn’t the same as having bad credit, an insufficient credit file does not provide enough evidence of your credibility or trustworthiness to lenders, thus hindering access to advantageous loans.

So, how can you overcome this hurdle while building your credit score? The options below can help you bypass a hard credit check and access the funds you need!

Borrow From Your Friends and Family – Or Tap Into Your Savings

While asking a loved one for financial support might be the last of your options, there are many benefits in doing so. And, with 25.6 million Americans now asking friends and family members for small loans to face the hardships brought on by the raging inflation, this alternative is all but an uncommon one!

Some of the advantages of asking your community for financial help are that, usually, you won’t need to pay interest on the amount borrowed, and you have more flexibility in paying back your loan.

Understand What Lenders Look for in an Applicant and Prove Your Credibility

While your credit score plays a significant role in your chances of getting approved for a loan, this three-figure number isn’t the only factor lenders consider when reviewing personal loan applications.

For example, you might still be able to obtain a personal loan without a credit history if you work for a reputable employer, benefit from a stable income, or can produce evidence of long-term employment. If you decide to pursue this path, be ready to supply your lender with documents such as bank statements, pay slips, or tax returns.

Try Consulting a Community Bank or Credit Union

If you have exhausted your options and are still seeking funding, you might consider working with a community bank or credit union instead of a traditional lender.

Often, getting a loan from a credit union is a more accessible option because these institutions focus on member needs, are not-for-profit entities, or operate in the interest of the community. In turn, they might have a more flexible approach to eligibility requirements and can design a loan solution more tailored to your credit status.

Understand How Credit Scores Work – and Start Building Yours!

Although the options in this list can help you get approved for a personal loan, you should not underestimate the importance of building your credit score! Over time, your FICO score can make a difference in the kind of financial products available to you and in how advantageous your loan terms will be.

For example, if your next step is to get a mortgage and secure your dream home, a high credit score can grant you access to better APRs and repayment terms.

While building your credit score can take time, there is no better time to start working on it than today! Online resources such as can help you kickstart your project and offer you the guidance needed to take all the right steps toward an excellent credit score.

Find a Lender That Offers Loans to Applicants With No Credit History

Although high-street lenders might represent a convenient option when looking for a loan, they are not the only – or best! – alternative to consider.

For example, some online lenders will be able to create ad hoc loan agreements for individuals without credit history looking to borrow small amounts to cover the expenses associated with refinancing, debt consolidation, or medical care.

When choosing this option, it is worth keeping in mind that, due to your limited credit history, you might face higher interest rates or reduced borrowing limits.

Opt for a Collateral-Based Loan

One of the challenges you’ll face while trying to get a loan is that lenders will only consider candidates with a credit score of 750 or above. This is mainly because, in the eyes of traditional lenders, individuals with a high credit score represent trustworthy borrowers for an unsecured loan.

However, if you own valuable assets – such as equity in your home or rental properties – you might be able to obtain a loan by pledging them as collateral. Doing so will make you appear a more confident borrower with the financial means to pay back the loan.

Apply With a Co-Applicant or Guarantor

Another option worth considering is to apply for a loan with a guarantor or co-applicant. A guarantor might be a spouse, family member, friend, or colleague with a solid credit history and regular income.

Your co-applicant pledges to fulfill your obligations if you find yourself unable to pay back the loan and their credit history will thoroughly be checked by the lender. Before asking someone to be your guarantor, make sure you both understand the responsibilities involved.

Looking To Build Up Your Credit History? Start by Partnering With a Financial Advisor

Building your credit history is all but easy – especially if you don’t know where to start! And, since you will need to learn how to use tols such as loans and credit cards, the journey is certainly not free of pitfalls and risks.

That is why partnering with a specialized financial advisor might be the best investment you could make to increase your chances of building long-term wealth!