Unsecured Loans with No Credit |
By Julie Mann |
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Lenders label individuals with no credit history as 'high risk'.
Being considered 'high risk' can be the 'kiss of death' when it
comes to getting approved for unsecured loans. Why Because
unsecured personal loans require no collateral. So, the lender
loaning you your money is trusting you that you will make timely
payments. This is not a personal issue of trust, it is a credit
issue. Lenders do not want to lend unsecured loans to people
with no credit or bad credit, period.
By now you are
asking yourself, 'How do I turn my no credit history into a
positive one so that I can apply for a personal loan. Easy
Being labeled 'high risk' makes it hard to get approved for
certain types of loans and credit, but not all.
Did you
know that car loans are one the best means for building credit?
When you take out a car loan, you are securing your loan with
the car that you are financing. If you don't make the payments,
you lose the car. So, lenders are much more inclined to provide
car financing to people with no credit before they approve an
unsecured personal loan.
Another great way to build your
credit history is to apply for a credit card. There are a few
credit cards available that are specifically designed for people
with no credit and bad credit. Be careful! You don't want to put
yourself into debt with use of your new credit card. You want to
make a few charges a month, that you can afford to pay for once
you receive your bill. Utilizing and paying for a credit card
will help build your credit very quickly.
A third means
of building credit is to put some utility bills in your name.
This means having the phone, electric, gas and/or water bill put
in your name, making you responsible for the payments. Again,
you want to make the payments on time, every month! Doing so
will also help build your credit fast.
If you follow two
of the above suggestions, you should be able to build a
non-existence credit history into a good credit history in about
one year. Then, when you need a little extra cash for a
vacation, shopping, etc., you can apply for and hopefully get
approved for personal loans. |
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