If you’ve ever tried applying for a loan and got hit with the dreaded words “no credit history,” you’re not alone. Getting your first loan without any credit can feel like a catch-22: you need credit to get credit. But the good news? It's not impossible.
Whether you're a student, new to the workforce, or someone who's just never had to borrow before, there are legit ways to get approved even if lenders don’t have a credit report to look at. In this post, we'll break it all down in simple language and show you how to get started—even from scratch.
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First Things First: What Does “No Credit History” Mean?
Having no credit history means you haven’t used credit in a way that shows up on your credit report. That could be because you’ve never had a credit card, car loan, student loan, or anything else that reports to credit bureaus.
While this might seem like a good thing (you’ve never been in debt!), lenders actually see it as risky. They have no idea if you’ll repay what you borrow, because you’ve never done it before—at least not officially.
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1. Try Credit Unions or Community Banks
Credit unions are like the friendly cousins of big banks. They’re often more flexible, especially with people who don’t have credit history yet. Since they’re member-owned and usually serve specific communities, they tend to offer more personalized service.
If you’ve got a stable income and a good relationship with your local bank or credit union, they might be willing to approve a small loan, even without a credit history. It’s worth setting up an appointment and asking.
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2. Apply for a Secured Loan
A secured loan means you put up something as collateral—like cash in a savings account or a valuable item—so the lender has some security if you can’t pay. The most common beginner loan is a credit-builder loan, which is often offered by credit unions and some online lenders.
Here’s how it works:
You “borrow” a certain amount, say $500.
But you don’t get the money right away. Instead, it’s held in a savings account.
You make small monthly payments over time.
Once it’s paid off, you get the money—and your payments are reported to credit bureaus.
Not only do you build credit, but you also save money in the process. Double win.
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3. Use a Co-Signer
Got a parent, sibling, or friend with good credit who trusts you? Ask them to be a co-signer on your loan.
This means they agree to repay the loan if you don’t. Because the lender is protected, they’re more likely to approve you even if you’ve never borrowed before. But be careful—if you miss payments, your co-signer’s credit can be damaged too. So make sure you’re 100% confident you can keep up with the payments.
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4. Explore Online Lenders That Cater to New Borrowers
Some online lenders specialize in working with people who don’t have credit yet. They may look at alternative data like your job history, income, education, rent payment history, or even your bank account activity.
These lenders use technology and algorithms to decide if you're a good candidate for a loan. A few to check out might include:
Upstart
Self
Possible Finance
Always compare interest rates and read reviews before you commit.
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5. Use Your Income and Employment as Proof
Even if you don’t have credit, steady income can help your case. When applying, provide proof of:
Employment (a recent pay slip or contract)
Monthly income
Rent or utility payment history
Some lenders may even allow you to upload bank statements to show responsible financial habits.
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6. Consider “Buy Now, Pay Later” Apps Carefully
Apps like Klarna, Afterpay, and PayJustNow (in South Africa) offer mini loans that don’t always require credit checks. If used wisely and paid off on time, they can help build a small track record of repayment. But be cautious—missed payments can hurt your credit or lead to fees.
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7. Start Small and Build Trust
Start with small loans—nothing crazy like R50,000 or more. Prove you can handle a small amount, and over time, lenders will trust you with more. Even getting a secured credit card, using it responsibly, and paying it off every month helps build your credit profile.
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Final Thoughts
Getting a loan with no credit history is definitely a challenge, but it’s far from impossible. The key is showing lenders that you’re responsible in other ways—whether that’s through savings, income, or a co-signer who believes in you.
Start small, be consistent, and before long, you’ll have a credit history of your own—and with it, access to better loan options, lower interest rates, and more financial freedom.
Remember: No credit is not the same as bad credit. You’re just at the beginning of your journey—and now you know exactly how to get started.
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