Funding Solutions

Taking Your First Loan With No Credit

A Desk Where a Loan Contract is Signed

The first time you apply for a loan with no credit can be both daunting and exciting. By building up your credit score when you first start using credit, there are many opportunities available to you in the world of finance.

Your first loan can open many doors for you if you take care of it accordingly.

Applying for and taking out a loan or getting your first mortgage becomes a whole lot easier when you have a good credit score. The use of credit is, of course, the only way you can develop and build a good score.

Application Process

If you’ve just turned 18, or even if you are a few years older, there are some tips and guides that you can use if you have never had any credit before. There is a process you have to go through when applying for credit and by following some helpful information, it can help you develop a good credit score. The other aspect of credit is to make sure you avoid debt in the future as well.

Applying for Credit

Just because everybody else seems to be getting cash back rewards and frequent flyer miles, don’t think you’re going to start your credit dreams that way. Eventually that will happen, but it’s not likely with your first credit card. Your options are a lot more limited with your first card.
There are a couple of options you can go with when you start:

  • a high interest,
  • low limit entry-level credit card from your bank,
  • or a secured credit card.

With a secured credit card, you put down the money upfront. The lender has no better security than already having your money should you default on a payment.

The other credit card option is a lot more like a “real” card: unsecured. However, be careful not to incur credit debt! With the high interest rate you’ll be charged, you definitely want to pay off your card on time and in full every month!

Using Credit

It’s not enough for you to just apply for credit. By using the card continually, but carefully, you can build a good credit score. The idea is to treat your credit card like a debit card and keep close tabs on how much you are spending. You don’t want any surprises in your monthly statement.

Credit Checks

The bureaus that check your credit account do so on a monthly basis. They look at the percentage of credit available and what you have used. The secret to this building of your credit score is try to avoid using more than 30% of the available credit. It’s smart to carry a small balance as well to show that you are actually using the card and the available credit.

Even if you use several hundred dollars every month, if you pay it off in full the credit scoring institutions won’t know that you’re actually using the credit available to you.


After about 8 months to a year of using your credit card, you may elect to upgrade your card to a rewards-based one. You should always be careful of the trap of credit debt and use the credit card responsibly.

Other Available Loans

  • Fast Cash loan – If you are working and over 18 years old, why not take out a Payday Loan? Remember, you’re only doing that to build a credit score and it’s probably worth the application fee. For example, if you’re earning $600 a week and living comfortably, take out a $250 Payday Loan and pay it back the following pay. That loan will appear on your credit history.
  • Student Loan – if you are continuing with your studies you are eligible for a student loan. Unpaid loans to date total a $trillion, so to avoid getting on the wrong side of your student loan is going to take some dedicated effort.
  • Bank Overdraft – Assuming you have a current bank account, ask them for an overdraft. Even a small credit amount will appear on your credit rating. Just make sure you stay within the limit.
  • Personal Loan – again, if you have a bank account and you are maintaining a reasonable balance, the bank is more than likely going to approve a small personal loan to get you started on the credit rating journey.

It’s not impossible to get a loan without a credit check. Lenders these days will simply look at your ability to pay back the loan based on your income and a few of the following personal records:

  • A current bank account
  • Be on the electoral roll
  • No missed payments on your credit file
  • A stable family address


Remember, it’s not a good idea to apply for credit too often especially if the enquiry you make gets recorded in your credit file. Lenders looking at your credit report might see your applications as a desperate chase for money. That will appear as a red flag to lenders.

One thought on “Taking Your First Loan With No Credit

  1. Applying credit for the first time is very hard if you don’t have a stable source of income. But if you have a stable income but due to some emergencies you were force to apply credit, you may need to pass some documentation and there is high chances that your credit application will be approved.

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