Loans for no credit history
If you’re looking for a loan but you have little or no credit history, read our guide to find out what this means for you.
We also partner with ClearScore so you can use them to see if there’s a loan that’s right for you.
Your credit score is based on your credit history. So, if you’ve always made your credit repayments on time and never defaulted on debt, your score should be higher because of the lower the risk you pose to lenders.
Having a limited credit history could result in the opposite. If you’ve never borrowed or had any bills to pay, lenders won’t have any info about your credit history and no evidence that you’ll manage repayments okay. So your credit score may be lower.
How to check your credit history
If you’re thinking about applying for a loan, it can be helpful to check your credit score first. A good credit history may give you access to more favourable rates and offers. There are three main credit referencing agencies in the UK, these agencies collect info about how well you manage credit. They are:
You can check your credit history on these sites too:
- Clearscore offers free access to your Equifax score and report.
- Intuit Credit Karma offers free access to your TransUnion score and report.
- CreditExpert offers free access to your Experian score and report for 30 days. After that, there’s a monthly fee.
- Snoop has a partnership with Equifax enabling you to check your credit score for free
To get a full idea of your credit history, you may need to sign up to Equifax, Experian and TransUnion together.
ClearScore can help you find personal loans:
- From £1,000 to £25,000
- Over 1 to 5 years
- No impact to your credit score
- Personalised offers tailored to your needs
- Know what you'll repay each month and over what term, upfront
Representative 48.7% APR
*Vanquis Bank acts as a credit broker, not a lender, introducing customers to our partner ClearScore. ClearScore acts as a credit broker and not as a lender. If you take out a loan, Vanquis Bank and ClearScore receive a commission payment from your lender. If you’d like further information about the commission Vanquis Bank or ClearScore receive as a result of your loan, please contact us. We will not charge you a fee for our services. Loans can only be offered to customers aged 18 or over. Credit is subject to status. Terms and conditions apply.
Common reasons for no credit history
If you don’t have a credit history, it might be the result of a few things:
Are you under 18 or have you recently turned 18?
If you’re under 18 years old, you won’t be able to view your credit report. If you’ve only recently turned 18 years old, your report is likely to have very little info on it. This will build over time as you start using credit responsibly.
Things like a mobile phone contract or an overdraft can appear on your credit file. Think carefully before applying for credit, making sure you can manage the repayments.
Have you recently arrived in the UK?
If you're new to the UK, credit agencies will not have any data for you. Even if you have a good score in the last country you lived in, it won't count. This is because credit reports and scores cannot transfer between countries.
It usually takes up to six months of living in the UK and using credit for your first credit report and score to start building.
No credit accounts in your name?
It may be that you’ve never used credit before, either because you’re young or you haven’t needed to. If you share household bills, your name may not be listed as the account holder. This can also be the case if your mobile phone contract is in someone else’s name.
Our Credit Risk expert says...
“Being new to credit or working to rebuild your history can feel daunting, but there are positive steps you can take. Borrowing only what you can comfortably afford, making repayments on time, and using credit responsibly can all help improve your credit profile over time. Small, consistent habits, tailored to your situation, can make a real difference over time.”
Riccardo Coppola, Head of Credit Risk Strategies
How you can build a credit history
Your credit history shows lenders how well you can manage a credit agreement (or not). If you don’t have a credit history, you may struggle to get approved by lenders. Here are some things you can do that may help build your credit history…
Open a bank account
Having a well-managed bank account can be a good way to build credit. If you can show lenders you can run it in a responsible way, they may be more likely to lend to you. If you have an overdraft, it helps to stay below the limit and to pay it off as soon as possible.
Get a credit card
If you’ve never had credit, a credit building credit card could help you improve your credit score, when used responsibly. These cards are made for those new to credit or with limited credit history. They usually come with lower credit limits and higher interest rates.
As with any credit card, it’s important to always make at least the minimum monthly payment but always aim to pay it off in full each month. Missing this can lead to fees, extra interest, and a negative mark on your credit file.
Manage your bills
Another way to build your credit score is by managing your bills. Taking care of these will show lenders you’re responsible. Things like paying your monthly mobile phone bill in full and on time can improve your score. Once you’ve shown you can do this over time, your score is likely to improve. Setting up Direct Debits so you never miss payments can help with this too.
Electoral roll
Making sure you’re on the electoral roll can make a big difference to your credit rating. When you register for the electoral roll, you need to share some details about yourself. This info helps lenders check your identity and prove your address. Your credit score can increase as a result. It can also help you save time on credit applications and avoid the risk of identity theft.
Take out a small loan from a trusted lender
Taking out a small loan could be a good way to build credit. Loan repayments are usually a fixed monthly amount. Once you’ve paid in full and on time, your score may improve.
Remember, you should only take out a loan if you’re sure you can meet the monthly repayments. You can use a loan calculator to work them out.
Is it possible to get a loan with no credit history?
Yes, but you may not have a lot of options if you have a bad credit history or none at all. While some lenders will consider lending to you, they could see you as a risk. This is because they’ll have no idea of how well you can handle money. As a result, these loans can have higher APRs.
But there are other options:
- Guarantor loans: A loan backed by someone else who agrees to repay it if you can’t.
- Credit union loans: Loans offered by not for profit organisations, often with more flexible conditions.
- Specialist lenders: Providers that focus on customers with little or no credit history and often charge higher rates.
What are the alternatives to loans?
A low credit score can limit your borrowing options, but there may still be alternatives worth considering.
Other options include:
- Credit cards: If you have little or no credit history, getting a credit card can be difficult. If taking out a loan isn’t suitable, a credit builder credit card could be worth considering. These cards, sometimes called ‘bad credit’ credit cards, help people with poor or limited credit histories. They usually have lower credit limits and higher interest rates, but paying at least the minimum amount on time could help improve your credit score.
- Overdraft: An overdraft lets you borrow more money than is available in your current account. This can help you cover unexpected expenses or help keep you going until payday. Just remember, using your overdraft will usually charge you interest.
- Salary advance: A salary advance is when you get part of your pay before payday. This can come from your employer or a third-party provider. The amount you take is then deducted from your next pay, often automatically.
FAQs
Is it possible to get a loan without a credit history?
Yes, it’s possible to get a loan without a credit history, but it can be more difficult. Lenders use credit history to assess risk. If you have little or no credit history, you might have fewer options. You could also face higher interest rates or get smaller loan amounts.
What is the minimum credit score for a loan?
The loans available through our partner ClearScore have no set credit score cut-off. Applications are reviewed by a panel of lenders. Each lender has its own criteria and risk preferences. Credit scores can differ among credit reference agencies. A score that seems low with one agency might be seen more favourably by another.
If a customer has a weak credit history, some lenders might still offer a loan. However, they may want extra reassurance. This might involve a guarantor, like a trusted friend or family member (not a partner or spouse). They agree to help if repayments can’t be made. Or you could secure the loan against assets or a home. These options usually come from specialist lenders. They aim to help people with bad credit, even if they aren’t well known.
Do all lenders do credit checks?
Most lenders carry out some form of credit check as part of the application process. This helps them assess affordability and risk, although the type and extent of the check can vary between lenders and products.
What are you looking for?
Bad credit loans
I have bad credit. Can I still get a loan?
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