How to Get a Loan with No Credit History in the US

For many people living in the US on a visa, getting a loan can be difficult without any previous credit history in the US. To help you out, we’ve created this guide on how to get a loan, even with no credit (not to be confused with bad credit!).

How to Qualify for a No Credit History Loan

To get a personal loan when you have an incomplete credit history, give a lender (such as Stilt) all the information about your spending, future income potential, and financial history. With this information, a lender can determine that you qualify despite the lack of credit history.

That is the short answer. The long-term answer lies in building more credit in the first place.

How to Build Your Credit

The best way to get a loan with no credit history is to start building credit. However, this option takes the most time and the most work. Building credit is not an easy task, and many people spend much of their lives rebuilding low credit or working to get a higher credit rating.

If you want to start building your credit, here are a few of the best ways:

Get a Credit Card

Getting your first credit card is how you can get your first credit score. After obtaining your first credit card (with no credit history) and beginning to make payments, after a few months, you will receive your first credit score and can start working your way up from there.

Many banks and credit unions have great benefits for credit card holders. Often times, they have specific credit cards based on your lifestyle, work, or even the stores you shop most frequently at.

Although getting your first credit card can be relatively simple, it is important to remember that doing so is a very big financial decision. Although using a credit card responsibly can build your credit score, making a few bad decisions with your credit card can quickly lead to a low credit score.

Before applying for any card, ask yourself if you are ready to handle the responsibility of a credit card, if you can make monthly payments on time, and if you will use the card with caution.

Become an Authorized User on an Account

Another way you can start building credit is becoming an authorized user on someone else’s credit account. This is a way you can build credit, without having a credit card account yourself.

As an authorized user, you will receive your own physical credit card with your name on it, however, you will not be the one responsible for paying off debts on the card.

This option won’t build your credit quickly since you are not the primary credit card holder. However, it can help those who have no credit or very little credit.

Have Your Rent Payments Reported

For many people who don’t have a credit history, they do have a history of paying rent on time, and that history can help their credit scores.

There are many ways you can get your rent payment records factored into your credit score. The most popular is using online services such as Rent Reporters, Rental Kharma, and RentTrack.

These services do have enrollment fees but the cost of reporting your rent payments can pay off in the higher credit score you could potentially receive.

Read more about building your credit:

How to Build Credit

The Basics of a Credit Builder Loan for Non-US Residents

No Credit History vs Bad Credit: What’s the Difference and How Do You Fix it?

Top 5 Loans for People with No Credit History

There are dozens of online lenders offering private loans, and it can be hard to determine which lender will be the best for you. To make your search for the best lender easier, we’ve compiled this list of the top X lenders for people with no credit.

Stilt

Stilt is an online lender that dedicates themselves to providing the underserved with funding: international student loans, immigrants, people with no credit history, and so forth. They take a holistic approach in determining loan rates which allow those with no credit history to still get great loan rates.

Avant

Avant loans are easy to obtain through their simple online application which only takes a few minutes to complete. They value time and convenience and work to get you access to a personal loan with great rates in a timely manner.

After applying for one of their loans, you are immediately presented with a variety of loan options from which you can choose your loan and sign your contract online.

BestEgg

Bestegg was created to make getting a personal loan easier and simpler. Instead of taking a trip to the bank, filling out lots of paperwork, and waiting for a decision, Bestegg hopes to make the loan approval process much more efficient through their online application and investors who are ready to say “yes” to applicants right away.

Earnest

Earnest uses data like your savings patterns, investments, and career trajectory in order to give you a competitive rate based on your personal background rather than just your credit score. Their Precision Pricing software helps borrowers save money by using the student’s budget to determine a unique rate and term that will work best for a student’s lifestyle. This makes Earnest one of the best options for borrowers still in school.

One Main

One Main loans require you to visit a branch in order to meet with a loan specialist who verifies your identity, income, expenses, employment, and collateral. Although this can be a hassle compared to the purely online application processes of other lenders, meeting with a loan specialist in person allows you to discuss your loan options more in-depth and puts a personal connection between you and the lender. After you meet with the specialist, One Main Financial will deposit your money the same day making it a very quick option.

6 Ways to Get a Loan with No Credit History

If you need a loan quickly and don’t have time to build your credit, there are other options available for you. Here, we put together the top 5 ways for you to get a loan with no credit history.

1. Get Financing from a Credit Union

Credit Unions are nonprofit financial centers that are owned by their customers. Most loans from credit unions (like these from Eastman Credit Union) have lower rates and fees and are typically easier to get approved for a loan.

For most loans from credit unions, you must become a member of the credit union. This process is simple, usually taking online a few forms and documentation. From there, getting approved for a loan can happen even without any previous credit history.

Often times, a staff member at the credit union will personally review your financial history and personal situation to determine your loan rates. This allows them to see factors that demonstrate your responsibility that another lender may not have noticed based on your credit score alone.

2. Find a Cosigner

Many lenders require those without any credit history to have a cosigner in order to be approved for a loan. This makes having a cosigner extremely valuable when wanting to get a loan, especially when you have no history of credit or a very low score.

A cosigner is an individual who signs onto the terms of the loan with you and agrees to take responsibility for any loan debts that you do not pay off. Therefore, if you fail to pay back the loan, the lender has someone else they can turn to in order to get their money back.

If you have a close friend or relative who trusts you and believes that you will be a responsible borrower, they may be willing to be your cosigner in order for your loan to be approved. If this isn’t your situation, here are a total of 8 ideas for finding a cosigner for your international student loan.

3. Take a Personal Loan from Family or a Friend

Since going to a lender can either be a poor option or an unobtainable option for many with no credit, often, it is much easier to take a personal loan from a family or friend instead.

Since close friends and family often can determine your level of responsibility due to their relationship with you, they may be more willing than a lender who only knows your credit score to give you a loan.

However, one thing to keep in mind with this option is that taking a personal loan from a family member or friend may often ruin the relationship between the two of you. If you end up not being able to pay back the individual, you may lose your relationship with that person as well.

4. Find a Peer-to-Peer Lender

Peer to peer lending happens through online services that match lenders with borrowers. Often times, these rates for loans are much lower than the normal loan options because the interest rates are set by the individual lenders themselves to compete to give the lowest rate.

A few online services that will match you with a lender include LendingClub and Prosper.

5. Take a Secured Loan

Secured personal loans allow you to obtain loans by pledging something you own in return for the loan amount. If you pay the loan back within the loan terms, then you will receive the collateral back, however, if you don’t, the lender can seize that asset and your credit score will drop.

You can find secured loans from banks, credit unions, and online lenders, all with varying benefits, loan amounts, and interest rates.

6. Get a Private Loan

There’s yet a third option for you if you have no credit, and it might not be an obvious one: get a private loan. A private loan is any loan not offered by the federal government. These loans are mostly from online lenders that offer great rates due to the number of lenders available.

Conclusion

Getting a loan with no credit history can be difficult — whether that’s a personal loan, an auto loan, or even just a credit card with no credit history. However, by following any of the options listed above, you will be able to find a loan option that works with your financial needs. Stilt is dedicated to helping secure your financial future, so if you have any questions, let us know down below!

Alyssa Francisco

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