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If you have never had credit in your own name, it can be difficult to get a car loan or credit card. Having no credit history can be as much of a problem as having a bad credit history. Students, other young people, and newly divorced or widowed women who have always obtained credit jointly with their husbands often find themselves in this no credit situation or with bad credit but not being responsible for it.
Bad Credit? Repair It
The first step to qualify for a loan with bad credit is to get a credit report and repair your existing credit rating. Each item on your credit report must be proven or it cannot remain in the report. If the credit bureau cannot verify the item when investigated, it must be removed from your file whether it is true or not. Every negative entry on your report can be denied or challenged at any time. The bureau must reinvestigate and if that item cannot be verified within a reasonable amount of time, it must be removed from the file.
Legitimate lenders never guarantee or say that you are likely to get a no credit loan or a credit card before you apply, especially if you have bad credit, no credit, or a bankruptcy. Many lenders use credit scoring systems which allocate points to various pieces of information given on your application form, such as your age, your occupation and whether you own your home. Points are then added together to produce your credit score. This helps the lender predict whether you are an acceptable risk or not.
Different lenders have different systems and pass marks, so you can be turned down by one but accepted by another. Your credit score is not part of the file kept by the credit reference agencies. Lenders do not have to tell you exactly why they have turned you down, but they should give an indication of the reason. The American Consumer Credit Counseling can assist you in providing workable solutions for your financial problems.
Beware of Mail Scams
Keep in mind, if you are looking for a no credit loan, that loan applications that look like checks arriving in your mailbox are actually loan contracts. By cashing such a check, you are in effect taking out a loan with the lender who mailed you the check. These loans usually cost more than those from a bank or credit union.
Be Patient and Stay Positive
Remember, you did not develop bad credit in a single day, so you need time to repair it. You’ll probably be able to get a no credit loan immediately or in a short period of time, but this loan will have non advantageous terms and you may feel taken in. You should bear in mind that you represent a risk to lenders and that they are just compensating for that risk. Once you repay the loan, your credit score will have improved and you’ll be able to get better terms next time. With time, you’ll recover a good credit score and recover your ability to get finance from traditional lenders.
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