Payday loans and high-interest installment loans, for example, may not require a credit check. Alternatively, if you possess a vehicle or valuable property, you may be able to obtain a no-credit-check auto title loan or pawn loan. However, these should be considered a last choice because their high costs can make repayment impossible, sometimes ending in a cycle of reborrowing at exorbitant rates.
However, there are more and better possibilities for persons with no credit score. Lenders may look at other factors in these cases, such as your relationship with the company, job history, and debt-to-income ratio.
Several Low-Cost Alternatives
If you want a personal loan without a credit check, consider the following options:
Investigate early payday applications to check if you qualify for a loan based on your income. Contact credit unions to determine whether you qualify for an alternative payday loan.
Contact the local loan officer if you have an account at a community bank or small credit union. Based on your income and account history, you may be eligible for a personal loan.
Enquire with your employer about employee loans. Some businesses have explicit rules for employees who have been with the company for at least a few years and require a loan for an unexpected expense.
Alternative data can be used by some online lenders, such as Experian partner Upstart. For example, you may be requested to link your bank account, and the lender will review your financial history to assess your eligibility and loan offer.
A loan from a friend or family member is another possibility. However, lending and borrowing money can strain and, in some cases, destroy relationships. So if you take that route, make sure to obtain your agreement in writing and follow through on the payback terms you agree on.
Many of these choices don’t require strong credit—or any credit at all—but the lender may run a credit check. In some circumstances, having no credit is preferable to having bad credit.