When you have no credit history or have a poor credit score, you may not consider applying for a personal loan because of the credit check. There are options for you to borrow money without worrying about your past financial history. The process is not easy, but it can be done.

Your first step is determining whether you need a loan with a credit check. This loan type has drawbacks like strict terms and a high interest rate. Check your credit score and see if a conventional loan is a better option for your needs. Your score will not be affected by this.

The Importance of Credit Scores

If you have little to no credit history, you are considered to have a “thin file.” This means you will likely have a difficult time getting new credit because lenders do not have enough information about you to do a risk assessment. This is why you need to know what is in your credit file before starting any loan application process. It is possible that your score is high enough to qualify for a regular personal loan with good terms and a better interest rate. This saves you money over the life of the loan and helps you to pay it off faster.

The majority of lenders will check your FICO score when you apply for a loan. This number ranges from 300 up to 850. Any number below 669 is fair or poor. Scores over 700 are good and excellent. If your score is below the good range, you will want to consider a loan that does not require a credit check.

Approaching Lenders Directly

While it may seem intimidating, approaching lenders and banks directly can be a good strategy if you have no credit history, a poor credit score or want use other aspects of your finances as proof of creditworthiness. This can be your income itself or the length of time you have been employed. In addition, many lenders now use alternative information about you that is not in your credit file. This can be data regarding your bank accounts, your payment history and your debt-to-income ratio. You can find out if lenders use alternative data by looking through advertisements for personal loans.

Being Prepared

When you are ready to apply for a personal loan with no credit check, you must be prepared to prove your worth and that you are a limited risk to the lender. This means bringing along records and documents that indicate that you have stable finances and are able to repay any new debt that you take on. Your chances of getting approved are much higher with this approach.

These are the documents that you should bring along when you are in discussions with lenders:

• Copies of your tax returns for the previous two years
• Proof of employment history and stubs from your paychecks
• Proof of your borrowing and payment history, including student loans, car loans and mortgages
• Credit card statements indicating your level of debt
• Bank statements showing the balances of your checking and savings accounts
• School records that indicate your education level.

Online Lenders

If you do not want to deal with the bank, you can consider an online lender. In most cases, you will only need to have a couple of financial accounts on your credit record, and alternative information will be used to make a lending decision.

When you need money fast and have limited options, DR Credit is always available to assist with your financial needs. Visit the website to apply.