Getting a Loan With No Credit: 4 No-Credit-History Loans

If you’ve never used a credit product — such as a traditional credit card or loan — then you likely have no credit history. And if you find yourself in this situation and need to borrow money, it can be hard to find a willing lender. Fortunately, there are a few personal loan lenders that offer no-credit-history loans with other qualifying criteria.

Our ranking for the best no-credit-history lender is Upgrade thanks to its emphasis on other qualifying factors like income, current debt, and work history over credit score. Review multiple lenders and prequalify to find the best one for your situation.

Why you can trust Credible

The Credible editorial team is independent and unbiased, which means that partners do not influence our editorial content. To help you find the best no-credit-history loan for your situation, we analyzed over 1,000 personal loan data points. Using data-driven methodologies, we scored criteria that are important to you. This approach allows us to objectively rank personal loans. To learn more, read our methodology below.

4 loans for no credit history

If you don’t have a credit history, it means there’s no information about you to report to the three main credit bureaus — Equifax, Experian, and TransUnion. You probably don’t even have a credit score. In this case, you’ll need to find a lender that lets you qualify for a loan based on factors besides your credit, such as your income and employment history. 

The lenders below have flexible eligibility requirements or offer personal loans with a cosigner or joint applicant, and if you apply directly on their websites may have no minimum credit score requirement. Where offered, visit the lender's website to get a cosigned personal loan.

Methodology

Credible evaluated over two dozen lenders to find the best no-credit history loans. Our team of experts gathered information from each lender's website, customer service department, directly from our partners, and via email support. We chose the best lenders based on the following weighted categories:

• Rates and fees: 18%
• Loan terms: 18%
• Customer experience: 17%
• Eligibility: 14%
• Customer satisfaction: 10%
• Efficiency: 10%
• Options for poor credit and no credit: 9%
• Discounts: 4%

Each data point was verified by a third party to make sure it was accurate and up to date.

Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.

How to get a personal loan with no credit history

Getting a personal loan with no credit history might be tough, but it’s still possible. If you’re ready to apply, follow these four steps:

1. Research lenders: Be sure to compare multiple lenders to find the right loan for you. Start by looking for lenders that don’t require a minimum credit score or that allow cosigners. A cosigner is someone with good credit who’s also responsible for repaying the loan — a lender is more likely to approve your application if someone with good credit is on it. 
2. Prequalify: Once you’ve found lenders you might qualify with, take the first step to find out by prequalifying with them. Prequalification can give an idea of what you’ll qualify for, and it won’t hurt your credit score (if you have one). But it’s not an offer of credit, and not all lenders let you prequalify before applying. 
3. Compare lenders: Compare annual percentage rates (APRs) between lenders to see which may have the lowest cost to borrow money. Also consider the repayment terms and loan amounts you might qualify for, as well as funding times, fees, and discounts. Note that if a lender charges an origination fee, that amount will likely be deducted from the loan proceeds, which means you’ll receive less than what you applied for.
4. Pick your loan option: After comparing lenders, choose the loan option that best suits your needs.
5. Complete the loan application: Once you’ve found a lender, you’ll need to fill out a full application and submit any required documentation, such as bank statements or pay stubs. If you’re applying with no credit history, you might also need to provide your employment history or other information, depending on the lender. If you have a credit score, submitting a formal loan application could temporarily decrease it — usually by no more than 5 points.
6. Review the loan agreement: If you’re approved, the lender will have you sign for the loan so you can get your money. Review the agreement to make sure the loan amount, repayment period, and fees are as expected. 
7. Receive your funds: It usually takes less than a week to fund a personal loan — though some lenders can send money on the same or the next business day after you’re approved.

Plus, signing up for automatic payments might get you a rate discount - often 0.25 percentage points, depending on the lender.

No matter what type of personal loan you choose, be sure to consider how much the loan will cost you over time. You can estimate how much you'll pay for a loan using a personal loan calculator.

What to do if you can’t qualify for a personal loan

If you’re still having a hard time qualifying for a personal loan with no credit history, here are a couple other options to consider:

1. Find a cosigner: Having a cosigner with good credit could mean the difference between getting approved for a loan and getting rejected. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d qualify for on your own. A cosigner is usually a good friend or family member who’s willing to put their credit on the line for you.
2. Apply for a credit-builder loan: A credit builder loan is similar to a regular personal loan, but works in reverse. Instead of getting the loan funds upfront, you make monthly payments for a specified period of time — which are reported to the credit bureaus — and then get your loan funds. Credit-builder loans can be a great way to demonstrate that you're a responsible borrower while improving your credit, but only work if you can wait for the funds. Terms typically last from 6 months to 2 years. 
3. Apply for a secured loan: While many personal loans are unsecured, some lenders also offer secured personal loans that require collateral, such as a car or other valuable item. These types of loans are less risky for the lender, which could make it easier to get approved even if you don’t have a credit history. A secured personal loan might also come with lower interest rates compared to unsecured loans. But if you fail to make your loan payments, the lender can take your collateral.

Learn More: Was Your Personal Loan Application Denied? What To Do Next

Watch out for predatory loan practices

While some trustworthy lenders offer no-credit-history loans, you also need to look out for predatory lenders.

For example, if you’re looking for a personal loan that doesn’t require a credit history, you should generally avoid the following types of loans:

• Pawn shop loans
• Payday loans
• Cash advance loans

These types of loans often charge exceptionally high fees — sometimes equating to an APR of 300% to 500%. They can also trap you in a cycle of debt that takes even longer to pay off.

Plus, most of these lenders don’t report on-time payments to the credit bureaus, which won’t help you build credit that could make you eligible for better loans in the future. But if you’re late or miss a payment, the lender could send your debt to a collections agency, which would likely report it to the credit bureaus.

How to spot predatory lenders

Here are several personal loan warning signs to keep an eye out for:

• Not requiring a credit check: Legitimate personal loan companies typically review your credit to determine how likely they think you are to repay a loan. While some short-term loans — such as payday or pawn shop loans — don’t require a credit check, others could be a scam.
• Demanding upfront payment: Unless it’s a legitimate credit-builder loan, you shouldn’t have to pay money before you get your loan funds. Also watch out for scammers wanting you to pay through unusual methods that can’t be tracked, such as with a prepaid credit card.
• Using high-pressure sales tactics: Scammers might use language like “limited-time offer” or “act now” to push you into making a fast, uninformed decision.
• Approaching you about the loan: While legitimate companies sometimes advertise loan offers through the mail, a company or individual approaching you out of the blue with a loan offer might not be legitimate.
• Lacking a physical location: A real, vetted loan company should be able to provide a physical address that you can verify. If not, it might be a scam.
• Not feeling comfortable: Trust your gut — if something seems off, it probably is.

You can also review the lender’s Better Business Bureau (BBB) reviews — though keep in mind that the BBB isn’t a definitive source for determining whether a lender is legitimate.

How to build credit history

Building a good credit history not only helps you qualify for loans, it also can help you get approved to rent a home, avoid paying deposits on services, and even qualify for certain jobs.

Here are a few ways to build credit history:

• Take out a small secured loan: When you take out a secured personal loan, you provide the lender with an asset, such as a car or savings account. A small secured loan — with an equally small payment — can be an affordable and manageable way to show lenders you’re a responsible borrower. Note that if you default on your loan, the lender could take your collateral.
• Apply for a credit-builder loan: When you apply for a credit-builder loan, the lender deposits a small amount of money into a locked savings account, which you pay back over 6 to 24 months. At the end of the repayment term, you receive the funds. Loan payments are reported to the credit bureaus, so it’s important to make them on time.
• Get a secured credit card: A secured credit card has a line of credit equal to an amount you deposit with the company. After you show that you can make on-time payments, you might be able to get your security deposit back, increase your credit limit, and even upgrade to an unsecured credit card.
• Become an authorized user: Having a family member or friend add you as an authorized user on their credit card can help you piggyback off their good credit. You’ll receive your own card, but you don’t have to use it for your credit to improve. If you do use the card, make sure you’re set up with a way to make on-time payments.

How to monitor your credit

As you build your credit, it’s a good idea to monitor it. This can help you keep an eye out for fraud. Here are a few ways to do this:

• Review your credit reports: You’re entitled to a copy of your credit report from each of the three credit bureaus every 12 months. You can use Credible's credit monitoring tool to review your credit reports for free. If you’d like to review your credit throughout the year, you might consider accessing a report from one of the credit bureaus every four months.
• Sign up for a credit monitoring service: Several services are available that allow you to monitor your credit — some are free, while others charge a fee. For example, Experian provides free credit monitoring and also lets you have other bills (such as cellphone or utility bills) reported to the credit bureaus, which could also improve your credit score.
• Check with your bank or credit card issuer: Many banks and credit card issuers provide free updates to your credit score and credit report.

Read More:

• How To Improve Your Personal Loan Application
• Best Personal Loans for Fair Credit
• Best Personal Loans for Bad Credit
• Best Same-Day Personal Loans
• Best Banks for Personal Loans
• Best Credit Union Loans