Have you ever asked yourself why someone would walk into a bank and apply for a huge loan worth thousands of dollars while another one would not even qualify for a few dollars? This difference is brought by the credit score which is built over time. A credit score is derived from your behavior of borrowing little loans and repaying them. People who borrow often and repay their loan within the required period have a higher credit score than those who do not borrow at all. Well, this brings us to another question which many young people who are trying to establish themselves ask. How can I start borrowing without a credit score? The answer to this question is very simple; you can start borrowing even with no credit score according to your savings and banking transactions. The only sure thing a borrower must provide when borrowing money is proof that they are able to pay back.
One the lender verifies that you are able to pay your loan; you will be approved to proceed and take a loan. You can start by applying for a small loan and repaying it quickly so that you increase your credit score. Every borrower must ensure that they do not exceed the maximum number of days given to repay the loan.
Defaulting little loans affects the borrower’s creditworthiness so badly and it could block you from accessing even the simplest quick loans available in the UK. It is common knowledge that every individual must have a starting point. That’s why lenders of small loans such as those amounting from$1000 to $50000 approve loans for young people with no credit history or score.
The first time borrowers have a chance to borrow from such borrowers because the lenders understand that there is always a starting point for every individual. The first time borrowers are then advised to utilize the loans wisely so as to be able to repay the loan and stand a chance to apply a higher amount of the loan which could help them expand their small business or invest in more lucrative ventures. When people borrow for the first time, they are advised to invest the little loans in small businesses that can generate income and help them raise money so as to grow. If you go to apply for a quick small loan and you go with the mindset of taking a loan to go for a holiday, and you do not have a job, I would discourage you not to take the loan. If at all you have to take it, think of that beneficial venture you can undertake and build yourself from there.