Being “credit invisible” – a term that is usually used to describe borrowers who lack sufficient financial history toproduce a credit score- is a problem that affects more than 10 percent of Canadian adults according to the Office of Consumer Affairs. Lenders usually depend on your credit score to gauge how likely you are going to pay back the loan, so getting a loan without a verifiable credit history can be a be somehow tricky.
People who lack a credit history are considered as high-risk customers to traditional banks and other lendinginstitutions. Luckily, there are still other options such as no credit check loan that you can explore to acquire a loan. Here is how you can get a loan without a credit history.
Use a Credit Union
Credit unions are quite similar to commercial banks in terms of services offered. However, credit unions areusually owned by members other than profit-seeking shareholders. They are non-profit institutions that provide loans to its members at lower interests and better customer service. A credit union that is community-based or one thatis affiliated to your employer may be willing to look beyond your lack of credit history and make a sound decision on whether it will offer you a loan based on your promise to repay the loan and character.
Payday loans offer money to people with bad credit history, but some lenders will take a risk and lend individuals with no credit history at all. It is also good to mention that you can qualify for this type of no credit check loan even when you are unemployed. Learn more here. The lender isn’t interested in your lack of credit history but your willingness and commitment to repay the loan on time. However, such loans may attract slightly higher interest rates.
Get a Co-Signed Loan
You can still get a loan from a bank or credit union even if you don’t have a credit history, as long as you havesomeone with an impressive credit score who is willing to sign the loan on your behalf. This is what is commonly referred to as a co-signed loan. In this case, the cosigner agrees that he/she will repay the loan if you default. However, getting someone who is willing to take that risk is an uphill task. Even close friends and family members may be unwilling to become your cosigner.
Consider Peer-to-Peer Lending
Peer-to-peer lending which is sometimes referred to as person-to-person lending is a relatively new form of loans. Itis an online platform that allows individuals to borrow directly from other individuals other than from a money lending institution. You will be required to post your request online indicating the amount of money that you wish to borrow and why you need the money. Investors will review the loan request and select the ones that they wish to fund. However, there is no guarantee that someone will offer you the loan.