One of the oddest circumstances that comes up in credit problems is the lose-lose situation that many no credit borrowers find themselves in. No one will loan them money because they have no credit history, and they cannot build credit history without being granted a loan. This is a perplexing problem for many borrowers, typically those who are fresh out of school or college and looking to find a loan for a car or other purchase.
It can be difficult, because having no credit is almost as bad as having a detrimental credit file. The good news is that everyone starts out with a clean slate when it comes to credit, and building yours may be as simple as finding a no credit lender who specializes in lending money to those in your particular situation.
Building Up Your FICO Score
Your FICO score is the number that is assigned by credit reporting bureaus to allow lenders to determine your creditworthiness when you apply for a loan product or credit line. The FICO score is based on previous credit performance and history of credit obtained, and how that credit was used by the borrower.
The problem with no credit borrowers is that there is not enough information in their credit files for lenders to make an accurate decision on their loan. Special lenders who loan money to those with no credit have special guidelines for writing loans that can help you get approved in order to build up your FICO score.
Special No Credit Lenders
When you apply for your no credit loan, you will be asked to provide basic information, such as how much money you make, where you work at, how long have you been employed, where you live, how long you have lived there, if you are married, and whether or not you have a checking or savings account. All of this information is used by your no credit lender in establishing if they can loan you money and how much money they can loan you.
Online No Credit Lenders
Many of these lenders offer their services online, which can be a blessing for those with no credit as the actual application process in traditional banks can be quite daunting. Online lenders have a greater approval rating than traditional lenders as well, and can allow you to submit most of the documentation that is needed to process your loan online, either via a scanned email of the documentation that is needed, or by sending a faxed copy of the document. You will also be required to list several references that the lender can contact if you fall behind on your no credit loan payments.
Building Your Reputation As A Borrower With A No Credit Loan
Once you have received your no credit loan proceeds, you must make a good effort to become a responsible steward of your credit. This means making your payments on time, each and every month. Once you have paid off your first no credit loan, you will likely be eligible for bigger and better loans with new lenders.