Can you get a loan with no credit?

Lending decisions are up to individual lenders. So some lenders may approve people for a personal loan even if they have no credit history. But there just may be fewer options, higher interest rates and fees, and less favorable terms.

Learn more about how to get a personal loan if you haven’t established a credit history. Plus, learn about alternative ways to borrow when a personal loan isn’t an option.

What you’ll learn:

• Having little to no credit history can make borrowing more difficult. But it doesn’t automatically mean a personal loan is out of reach.

• Loans advertised as no-credit loans or no-credit-check loans (such as car title loans and payday loans) can come with added risks.

• Secured credit cards and credit-builder loans are alternatives to personal loans.

• Building credit takes time and responsible use, but starting now could improve your chances of qualifying in the future.

Having no credit means the three major credit bureaus (Experian®, Equifax® and TransUnion®) don’t have enough information about borrowing history to generate credit reports. Without a credit report, credit scoring companies such as FICO® and VantageScore® can’t calculate credit scores. 

The Consumer Financial Protection Bureau (CFPB) refers to this situation as being credit invisible or unscorable. Sometimes it might be called an insufficient or a thin credit file. Someone can be credit invisible or unscorable for a number of reasons, like when they have:

• No history of applying for loans or credit cards: Examples could include a younger person on their own for the first time or someone who just moved from another country.

• Credit accounts with no recent activity: The CFPB calls this a stale file. If no activity has been reported within six months of a credit score being calculated, that could affect scoring. 

• Credit accounts that are closed: This is another example of a stale file. For example, getting married doesn’t affect a person’s credit. But if someone who used to have their own accounts closes them after getting married, that could have an impact.

• Credit accounts opened too recently: A lot of factors play into timing, but the CFPB explains that it can take at least six months for a new credit account to be scorable.

• Credit history that isn’t being reported: If a lender isn’t reporting credit activity to credit bureaus, a person may be unscorable.

Having no credit can limit access to traditional loans. But it doesn’t mean there are no other options.

Getting almost any loan without a credit history can be a challenge, according to the CFPB. But there may be options. Before you apply for any type of loan, it’s helpful to:

• Compare options and understand the principal, interest, fees and payment terms.

• Consider your finances and settle on the amount you can afford to pay monthly. 

• Gather the documentation needed for the application ahead of time. This may include proof of identity, income, address and bank account information.

Credit score requirements for personal loans vary because lenders set their own requirements. Some loans, such as title or payday loans, may be advertised as no-credit-check loans. But these loans may have additional risks or be more expensive.

If you’re trying to build credit and access money, there are more options than just personal loans.

• Unsecured credit cards for limited credit: There are multiple types of credit cards designed for people with limited credit histories. The Capital One Platinum credit card is one example. 

• Secured credit cards: You could also consider a secured credit card like the Capital One Platinum Secured or Quicksilver Secured cards. These cards require a refundable security deposit, which can make them easier to be approved for than unsecured cards.

• Student credit cards: Student credit cards are designed for people in school who might be looking for their first credit card while they’re in college. 

• Authorized user cards: If the timing isn’t right to get your own credit card or apply for a loan, you could ask a trusted family member or loved one about becoming an authorized user on their credit card account. Authorized users can often make purchases with their own card, while the primary cardholder is ultimately responsible for all the charges made on the account.

• Credit-builder loans: They’re not great if you’re trying to access cash. But as the name indicates, they’re useful if you’re looking for a loan to build credit. Compared to traditional loans, these loans sort of work in reverse: A borrower makes payments to a lender and then gets access to the money at the end of the loan’s term.

Building credit takes time and consistency. To see where you stand, you can get free copies of your credit reports at AnnualCreditReport.com. 

You can also monitor your credit with CreditWise from Capital One. It’s free, and using it won’t hurt your credit scores. And the Credit Score Simulator shows how certain financial actions, like taking out a loan, might affect your credit score.

Here are the answers to frequently asked questions about getting a loan with no credit history.