The vast majority of Americans have loans. In fact, over 44 million Americans hold $1.5 trillion in student loan debt alone. That’s enormous!
But it’s important to remember that Americans are also ambitious, and having big goals can mean taking out a loan to achieve them. Not to mention all the other reasons why someone might need a loan- illness, family, living expenses…
So what do you do if you have bad credit and need a loan? It will require some planning and honesty on your part, but it doesn’t have to be a mystery. Keep reading to find out the most basic way to get a personal loan with no hard credit check.
Need more info on how to get a personal loan with no hard credit check? We’ve got you covered so you can start getting your loan without the hassle of a credit check.
Your First Step: Know Your Credit Score
First, you need to know what situation you’re really dealing with. That will require some research on your behalf. If you know what financing with no hard credit check actually entails, then you’ll need to know your credit score.
Credit score is on a spectrum, ranging from very poor to very good. A score of 300 is poor, and 850 is excellent. You’ll want to plug in your information on a site to get your FICO credit score.
Once you’ve done that, it’s important to remember that your credit score is just one factor in determining your credit eligibility. It’s an important factor, for sure, but if your credit is poor and you’re avoiding a credit check, you’ll need to rely on other factors.
Ask yourself honestly: is this your only option? Loans without a credit check can charge a lot of interest, and you’ll want to be sure this is your last resort.
Also, a credit score is not a reflection of you as a person, or how responsible you are with your finances. Sometimes a low score is a reflection of an underused or minimal credit. If you haven’t used much credit in your adult life, that shows on your score.
And, a low score won’t show if you’re paying your minimums on time, and if you don’t have delinquencies. Sometimes people with high scores won’t pay their bills on time.
Second: Approach a Bank or Lender Directly
Filling out an impersonal form online will mean that a human isn’t looking over the other factors that can help you get a loan. Instead, you should approach or bank or lender directly. More and more, people are talking to a real loan officer so a decision isn’t based just on credit score.
Other important factors that weigh an opinion are:
- Proof of full-time employment for 60 days or more
- A bank account in solid standing (no overdrafts) for 90 days or more
- Proof that you regularly pay your rent and household bills (including cell phone bills)
This will take some more research on your behalf so that you have all of this information ready to present to a person in charge. Which then leads us to…
Third: Have Your Case Ready
Getting together some really important paperwork for proof is your next step, and you won’t want to skip any of this. It might seem like overkill, but it will benefit you to be prepared.
Proving your credit-worthiness without a standard credit check is not easy, but it’s doable when you have these following documents ready to meet your potential lender:
- Tax returns (the past two years are ideal)
- Employment history and pay stubs, invoices, or other proof of income
- Borrowing history, including student loan and all of your progress on paying it off
- Documentation on credit card debt- be honest!
- Bank statements from the past year
Showing as much documented proof of your bill paying, employment history and general level of “adulting” will really help your case.
You’ll still also need some things in place to qualify for a personal loan with no hard credit check: Two active credit accounts open, a credit history of at least 36 months, and a debt to income ratio of less than 40%.
You Got Your Personal Loan with No Hard Credit Check: What Next?
You will still want to improve your credit score, even if you got your emergency loan without a credit check. Having a good credit score in the future will mean avoiding these panicked moments and scrambles for a loan. And if you’re really low on funds, you can seek out a non-profit credit counseling service or check out USA.gov.
These services will be able to give you personalized advice on your situation so you can work on rebuilding your credit score over time. They’ll also help you with creditors- and let’s face it, that’s one of the most stressful things ever. A counseling service can negotiate on your behalf, show that you’re intent on getting better credit and possibly lower your interest rates on your debt.
It’s super important that you find a reputable credit counseling service, because anything less than the best counseling could lead to more stress, debt, and loans in the future. Don’t let anyone bully you into a service that you don’t feel has your best interests at heart.
Credit Checks for Loans: Still Need Help?
It can be daunting to try and get a personal loan, and if your credit score is poor, it can be difficult. But this guide should give you a basic idea of where to start, and what to expect.
Need more info on how to get a personal loan with no hard credit check? We’ve got you covered. Check out this blog for more details so you can start getting your loan without the hassle of a credit check.