December 07, 2001
By: Bev Dodd
Loan with no credit: Take the first step
When expenses and monthly debts become more than you can handle, a loan with no credit could be the answer. If you find yourself in this situation, you should know that a loan with no credit is available. We'll discuss this more below.
The first step to receiving a loan with no credit is to get and repair your existing credit rating. Each item on your credit report must be proven or it cannot remain in the report. If the credit bureau cannot verify the item when investigated, it must be removed from your file whether or not it's true. Every negative entry on your report can be denied or challenged at any time. The bureau must reinvestigate and if that item cannot be verified within a reasonable amount of time, it must be removed from the file.
Legitimate lenders never guarantee or say that you are likely to get a loan with no credit or a credit card before you apply, especially if you have bad credit, no credit, or a bankruptcy. Many lenders use credit scoring systems which allocate points to various pieces of information given on your application form, such as your age, your occupation and whether you own your home. These points are added together to produce your credit score. This helps the lender predict whether you are an acceptable risk. Different lenders have different systems and pass marks, so you can be turned down by one but accepted by another. Your credit score is not part of the file kept on you by the credit reference agencies. Lenders do not have to tell you exactly why they have turned you down, but they should give an indication of the reason. The American Consumer Credit Counseling can assist you in providing workable solutions for your financial problems.
If you're looking for a loan with no credit, watch out for loan applications that look like checks arriving in your mailbox. By cashing such a check, you are in effect taking out a loan with the lender who mailed you the check. These loans usually cost more than those from a bank or credit union. Tear up these checks before you throw them out.
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