Credit score enables you to satisfy the eligibility criteria of being a personal loan application without any salary proof or a salary slip. Credit score is considered as an alternative if you don’t have you don’t have your salary proof with you. The Credit score is significant for anyone looking for financial aid. So, what if, under any circumstances, you have no credit score or a low credit score?
A Credit score defines the creditworthiness of an individual, especially one who is planning to apply for a personal loan, which is an unsecured loan. There are circumstances under which you might have “no credit score”. If you are applying for a personal loan for the first time, you might have no credit history at all, which means you might have no credit score. So, how can you apply for a loan in this situation ? are you even eligible to apply for a loan without a credit score? The answer is yes. Also, more and more financial institutions are offering these financial services to be more accessible. Getting an instant loan without a credit check in India is also possible today.
What Is The Credit Score?
A loan without collateral needs a credit check to determine your eligibility as an applicant. A credit score is a three-digit numerical summary of an individual’s or business entity’s creditworthiness. The Credit Information Bureau Limited duly records this score to assess whether you can repay the loan in due time. The banks and financial institutions share their credit data with bureaus like CIBIL, Experian etc., based on which this credit score is calculated. While applying for a personal loan without income proof or a salary slip, you can also get approval based on your credit score. What can you do if you have a low credit score or no credit score to show? Before that, let’s understand what a low or no credit signifies.
What Does Having a Low or No Credit Score Mean?
The credit score ranges from 300 -900, and anything below 750 is generally considered a low credit score. Personal loans, as unsecured loans, do not require collateral in return, as they signify a greater risk for the lender. However, a good credit score shows a history of timely payments and is proof of the individual’s creditworthiness. However, this does not mean it is impossible to get a long or short-term loan without the credit score. You can also apply for or get a loan without a good credit score; even after you have no credit history, there are other options that you can consider. This article will discuss precisely that. However, before getting to know more about ways to get an instant personal loan without a credit score, you should know your credit score status. You can log in to Buddy Score to check your free credit score. Buddy Score will provide you with the latest credit score evaluation with practical suggestions.
How To Avail Instant Loan Without Credit Score?
Availing of a personal loan is a quick and easy process, especially when you are planning to apply with a high credit score. However, some applicants have a credit score but need a credit score to avail of an instant loan.
While applying for a personal loan, lenders must meet the criteria. One of them is that you should have a high credit score. Then this will make it difficult for certain applicants to get an instant loan online. However, this section will discuss specific ways to make it possible to avail of instant loans without a credit score.
To avail of an instant loan without a credit score, applicants should consider the following points:
Applying For a Small Loan Amount:
Applying for an online instant loan without a credit score will help lenders be more likely to approve and disburse small loans online. The lenders may reject the loan application for a higher loan as they may look at more aspects to ensure your creditworthiness and the ability to repay the loan in full.
Apply With a Guarantor:
You can also avail of a personal loan without a credit score. If you are an applicant who has a low credit score or doesn’t have a score at all, you can easily apply for a small loan with a guarantor. The guarantor usually has to be the applicant’s parents, sibling, or spouse, especially someone with a good credit score. This can also drastically increase the chances of your online loan.
Lenders ask for income proof at the time of application. One should complete income details when applying for a loan. If the lender has detailed information about your steady income, it indicates that you can repay the loan on time, and the chances of loan approval improve significantly.
Request For a NA or NH on Your Credit Report:
If the History is not available on your credit report, that marks the absence of any previous credit activity and credit in the last months. Under such circumstances, you must discuss your credit inactivity with your lender. The lender can also understand your situation and will most likely you will be offered a personal loan at a slightly higher rate of interest.
How To Apply For An Instant Loan Without a Credit Score?
You can get a personal loan without credit score by following this process. As this process is quick and easy as borrowers can apply for loan online. This process entirely digital and applicants don’t have to send any physical paperwork. Follow the quick 4 simple steps to get loan on low credit score
Step 1. You can apply for an instant online loan without a credit score on your most trusted website or any personal loan app, like Buddy Loan . Buddy Loan as a loan aggregator helps you get instant personal loan form the most trusted lender of the country.
Step 2. Open the website or app. Add personal as well as professional details including age, employment, etc. Ensure that you have added the details correctly.
Step 3. Choose the loan amount that you wish to avail yourself, depending on your scenario.
Step 4. Give your PAN card details as a proof
Once you finish application, you will be notified from the lenders. Buddy Loan helps you avail instant loan disbursed in no time from the most trusted lenders in the country.
Also Read: How Late Payments Affect Your CIBIL Score?
How To Improve Your Credit Score ?
As the article focuses on you applying for loan without credit score, if its immediate requirement. Other wise , it is always suggested to take your time and dedicate practical steps to improve your credit score. As credit score is major factor to improve your creditworthiness, you should make sure that you take steps to improve it.
This section will help you to understand few such ways to improve the same.
Repay Credit Card Dues on Time
Paying dues on time not only prevents interest from escalating , but it also helps in improving your credit score in the long run. Paying outstanding credit bills can help in improving your credit score and getting into cycle of paying only the basic amount due as it appears on the credit card statement might help in escaping any kind of late payment charges.
New Credit Cards
While applying for credit cards and for loans, having an excessive number of credit cards and making high purchases might prove to be counter productiveness. Applying for a credit card, is a good idea to check your credit eligibility where it has chances of your loan application getting approved . This is because, it helps not only spending excessive amounts on your credit card but applying for credit cards from several banks can adversely affect your credit score.
However, ensure that you maintain a reasonable space between making applications to prevent lenders from believing that you are credit hungry. So, applying for credit cards when you can repay it helps in getting extra points to increase your credit score.
Keep Eye on Your Credit Report
Keeping a check on your credit report from time to time for inconsistencies and errors. Credit bureaus are legally bound to offer you one free credit report a year. However, if you find discrepancy in your credit score that is not caused by you then you should make sure you raise a dispute immediately. When the report could contain errors like incorrect information, delay in updating the report or a delay in updating important details in your report, than they can adversely affect your credit score. Any errors can be reported and rectified instantly.
Different Types of Credit
Is helpful and advisable to include different types of credit in your profile that will includes a mix of personal and secured loans, long as well as short term loans to improve your credit history. This step will improve your chances of availing a higher loan and a lower rate of interest when you decide to apply for a loan.
Increase your Credit Limits
Increasing your credit limit instantly lower your credit utilization ratio and will boost your credit score. Sometimes utilizing the credit limit available to you beyond a certain limit will result in the credit scoring models that will make you as a high-risk borrower. So utilizing the full credit limit, your credit utilization ratio increases significant risks of default. This risks on you can effect your credit score gets negatively.
So, It is wiser to increase your credit limit to manage your credit wisely at same time keep your credit utilization low.
Check Old Debt on Your Report
Credit score is a reflection of your past credit behavior and based on that, the lender approves the loan application.Keeping the records of your old good loan account in your credit report is good practice to increase your credit score. A debt that is repaid following within the stipulated time frame increases your creditworthiness and has a positive impact on your future loan application. One of the other ways to improve your credit score is to keep your good accounts active where you’ve got a solid repayment history for as long as possible.
A Hint of Risk
The credit scoring models are designed to pick up the early signs of stress and risks in the borrower’s profile. There are hint of risk if you are missing on credit card payments or you are suddenly paying less than the total due amount or revolving credit is the first sign of stress in the your credit profile. Other changes like taking cash advances or using cards at meeting business expenses are signs of stretched cash flow.
Multiple New Credit Lines
Opening a new credit line increases your credit limit, but every application for any new credit line will create a hard inquiry on your credit report. Hard inquiry is a detailed analysis of your credit profile to assess how much risk you possess as a borrower.
A hard inquiry is reflected on your credit report for two years, multiple hard inquiries in a short span of time can negatively impact your credit score. Hard inquiry resulting in rejection of loan application is an extremely negative event.
Also Read: 10 Ways To Improve Your CIBIL Score In Less Time
Now that you have know that you are very much eligible to get personal loan with no credit score or low credit score, then it should be easier for you apply for same and get the amount disbursed quickly. However, you should ensure that you have monitored your credit score frequently to have an idea of were you stand as a applicant.