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Is No Credit Better Than Bad Credit
28 Feb 2019

Is No Credit Better Than Bad Credit? Here’s Your Guide

You’re ready to be an adult. You want to get an installment loan to pay off some of the debt you’ve accumulated.

But, you have no credit – is that going to be a problem. Don’t worry; you’re not alone. 14% of the population has no credit. But at least you don’t have bad credit, right?

If you have no credit history, you probably wonder, “Is no credit better than bad credit.” You will be surprised to know the truth. Here’s your guide.

Difference Between No Credit and Bad Credit

The only type of credit you want to have is good credit. So whether you have no credit or bad credit, it’s going to be an uphill battle.

Lenders look at your credit history to see how big of a risk it is to lend money to you.

No credit

No credit means you don’t have any credit history. This often applies to college-aged kids who haven’t had to the chance to use credit cards or apply for personal loans no credit check.

Even if you can show a reliable income, lenders will still be hesitant to loan money. No credit can make it difficult to find a place to live, and you’ll often have to pay a higher interest rate if you can get a loan at all.

Bad Credit

Bad credit shows that you’ve mishandled credit in the past; such as late or missed payments. If you have payments that are sent to collections, that will hurt your credit as well.

Any credit score below 630 is considered bad credit, and when you’re taking out a loan you’ll need to look for bad credit loan lenders who focus on these types of loans.

Is No Credit Better Than Bad Credit?

Short answer, it can be.

There are often ways you can get around having no credit. The most common way is to have a cosigner.

A cosigner is someone who has a good credit score of 700 or higher. They will sign the loan with you and are responsible for the loan if payments are missed.

Having a cosigner will allow you to receive better terms on a loan and lower interest rates.

When you have no credit, you are building from scratch. You have an opportunity to build good credit.

Those with bad credit have to try to rebuild which can take a lot of time. It’s harder to erase a bad credit history.

What to do if You Have No Credit

If you have no credit, it’s time to get going on building credit the right way.

Here are some things you can do to start building credit:

  • Secured credit cards. These cards are backed by a security deposit.
  • College credit cards. A great starter card. They are easy to get with no credit
  • Credit-builder loans. Small personal loans that don’t require a down payment
  • Authorized user. Be an authorized user on someone else’s credit card. You are not responsible for payments but can start building credit while using it.

What to do if You Have Bad Credit

If you have bad credit, you need to start paying attention to your credit report. Here’s what to do:

  • Get a free copy of your report from the three major credit reporting agencies. You can do this once/year.
  • Check your report for errors. Any incorrect information on your credit report can damage your score.
  • Dispute errors online. You’ll have to do it separately for each agency.

You’ll need to stay on top of any current payments you owe. And credit misstep will star on your credit report for 7 years. Make sure you only have credit cards and loans that you can manage.

Let Us Help

So, is no credit better than bad credit? The answer is you need to have good credit, and we can help you get there. We are the professionals when it comes to providing options to those with less than ideal credit scores.

So don’t hesitate any longer. Come check out our learning center where we can help educate you about payday loans online and other financial products. We have all the answers you’ll need. Here are some other articles you might find interesting:

Your guide to no credit check loans
Loans for the unemployed – do they exist and how to get them
Quick loans no credit check
Online installment loans with monthly payments