Friday, 18 September 2015

Can you take a loan if you don't have a credit score

Most of the people who do not have a credit history, worry about getting loans for the first time ever. People who do not have any credit account or a credit score at all, are termed as 'no history customer' [NH customer] in the credit language. Well, there are some banks and lending institutes [NBFCs] that are willing to take risk on such people with no credit history to show. But here, the terms and conditions of lending could differ for first timers. For example, they may have to show assets of value as security against the loan being taken; or their pay back interest rates may be higher. These factors depend on and vary from bank to bank. Yes, one can take a loan if they do not have a credit history, means no credit score on record.

Most of the banking and non_banking finance institutes have recently opened up to the idea of lending to no history customers, to avoid disappointment. The process here may require a guarantor and/or an additional value deposit as a security. There are several factors taken into consideration when dealing with such customers. For example, their education background, employment details, type of residence and tenurity of stay at such residence, age,
Certain banks would be willing to welcome first time credit customers so that they get an experience of handling loans or credits. The customer will need to handle the credit given properly, with correct, timely payments, monitoring usage, and keep error free record; and keep a check on their credit.

For example: somebody who is a fresh pass_out from a reputed university with a higher degree of education, and is recruited with a prestigious firm; can probably avail for a credit card and maintain a good track record with the card lent. Once they achieve this over a period of time, they can probably gain the trust of a prospective lender and apply for a new credit line. Hence, a credit history of a considerable period can be looked at for new applicants and they could get a loan with a credit score to show.

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