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Unsecured Loans
Lenders label individuals with
no credit history as 'high risk'. Being considered 'high risk' can
be the 'kiss of death' when it comes to getting approved for unsecured
loans. Why? Because unsecured personal loans require no collateral.
So, the lender loaning you your money is trusting you that you will
make timely payments. This is not a personal issue of trust, it
is a credit issue. Lenders do not want to lend unsecured loans
to people with no credit or bad credit, period. By now you are asking
yourself, 'How do I turn my no credit history into a positive one
so that I can apply for a personal loan?'. Easy! Being labeled 'high
risk' makes it hard to get approved for certain types of loans and
credit, but not all.
Did you know that car loans are
one the best means for building credit? How? When you take out a
car loan, you are securing your loan with the car that you are financing.
If you don't make the payments, you lose the car. So, lenders are
much more inclined to provide car financing to people with no credit
before they approve an unsecured personal loan.
Another great way to build your credit history is
to apply for a credit card. There are a few credit cards available
that are specifically designed for people with no credit and bad
credit. Be careful! You don't want to put yourself into debt with
use of your new credit card. You want to make a few charges a month,
that you can afford to pay for once you receive your bill. Utilizing
and paying for a credit card will help build your credit very quickly.
A third means of building credit is to put some utility
bills in your name. This means having the phone, electric, gas and/or
water bill put in your name, making you responsible for the payments.
Again, you want to make the payments on time, every month! Doing
so will also help build your credit fast. If you follow two of the
above suggestions, you should be able to build a non-existence credit
history into a good credit history in about one year. Then, when
you need a little extra cash for a vacation, shopping, etc., you
can apply for and hopefully get approved for personal loans.
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