The first step is understanding that there are different types of these available, so learning how to get prequalified for no credit loans may vary depending on the direct money lenders, and what type of loan you hope to qualify for in terms of size and payment options. Getting prequalified for no credit loans is relatively easy though, but there may be some other determining factors necessary for these small short term signature loans.
In terms of getting qualified or even prequalified for a small signature loan, having no credit is actually better than having bad credit, though you can still get qualified for both no credit loans and bad credit loans with relative ease. The reason for this is because unlike home mortgage loans or new and used vehicle loans, the no credit loans are not based solely on your credit score and debt to credit ratio.
In much the same way as the bad credit loans, the no credit loans are based only in part on your credit score, and if the big three credit reporting agencies do not have anything on their reports, your no credit loan cannot be based on a non-existent credit report. Thus, the lenders who give out no credit loans tend to look at your personal life in order to determine whether or not you are financially and to some degree, socially stable.
When you do not have any credit, suddenly things like whether or not you have roommates or live with your parents will become important. How long you have lived in your present home will give an indication of how likely you are to be moving and how difficult it may become to track you down, in addition to determining the stability of your home life.
The no credit loan lenders will also want to know how long you have been at your present job. If you are only 18 and have no credit, and want to learn how to build up your credit score while you are still young, this will again help the no credit loan provider see how stable you are. If you have managed to hold a job for a couple of years when y
The short answer is yes – and no. No credit loans, in much the same way as most bad credit loans, tend to be short term signature loans. However, some of the no credit loans may also include revolving lines of credits such as low-limit credit cards, as opposed to the secured credit cards used by people with bad credit trying to rebuild and repair their credit score.
As was noted before, there are many similarities in how to get prequalified for a no credit loan and how to qualify for many similar bad credit loans. Your actual credit score is not nearly as important as your personal stability and the means by which you can pay back the no credit and bad credit loans. However, they also can be very different as well.
There are actually many used car lots, and buy-here/pay-here places where someone with no credit can get prequalified for a no credit loan with much better interest rates than the person with bad credit trying to get financing to buy a used car.
The difference in most cases is that for the no credit loans, some finance companies will carry the loan, or insure it to some degree. In the case of bad credit loans, many times the owner of the used car lot will have to personally carry the bad credit loans and assume all of the risk and liability in the event that the loan is not paid off.
This may start to sound a little old about now, but the short answer is yes – and no. Most of the no credit loans are specifically designed to help young people learn how to build good credit scores, and will report your payments to the big three credit reporting agencies. In this case, yes, the no credit loans should help you to build up a good credit score, even if you are young.
If on the other hand, you have been preapproved for a no credit loan with a smaller company, and they are carrying the loan, and they do not report your payments to the big three credit reporting agencies, it would be difficult to see those payments reflected on your credit score. In this case, the no credit loans are not going to be of any use in helping young people to build up a good credit score.
One of the best ways to get better deals when you are trying to get prequalified for no credit loans is to find some kind of short term loan or other small lending organization that can put your credit application in front of as many direct lenders as possible.
Mind you, this is generally best for small, short term signature loans, and not necessarily the ideal path if you are trying to apply for revolving credit like low-limit credit cards for people without any credit to speak of yet. For revolving credit loans or trying to get your first credit card, going to your local bank may be the best solution, especially if you already have a banking history with a particular financial institution.
If someone is asking you to pay an upfront fee to get you prequalified for a no credit loan, you should definitely be very cautious. This is certainly unethical and can be illegal in some States. There are plenty of reputable loan facilitators and other payday loan organizations where you can get your credit application put in front of many different direct lenders without having to spend any money out of pocket.