When a person wishes to acquire a loan and lacks a credit history , in most of the time it is denied. This happens because what the banks evaluate is their payment behavior, that is, the way the person has responded to their debts. Since he has never acquired a loan, he is not known to anyone financially. When this happens, the first thing asked by the different entities is that there is something that supports and supports the debt.
However, nowadays, traditional banking methods have been replaced by an avant-garde system. This system allows access to a loan despite not having a credit history that supports the ability and willingness to pay of the person who acquires the same. Hence the importance of starting a credit history that allows you to later opt for a long-term loan. An example would be mortgage loans, commercial loans, among others.
How to Start a Credit History?
Most of the time when we decide to undertake and require a loan. We question ourselves about the possibilities that we have at the moment of opting for a credit for the first time. Many times we think that accessing a loan can help us even to achieve our dreams. Our dreams can be to acquire a house, a car, finish a career, or maybe start an economic activity. However, in most cases, the loans to which we apply are not accepted. This is because there are several reasons why this may happen, the credit history is one of the most important.
People do not have a credit history because they were born with it, nor is it a priority to build it during their life. Then we must ask ourselves: When does the credit history begin? It usually occurs from the moment a person assumes the commitment to make a series of payments for a service, product or loan. From here, your payment history begins to register. In this way the bank can evaluate how profitable it would be to grant the loan to the person requesting it.
That is why to begin a credit history is necessary to commit to make a periodic payment. This is through a contract, since that in one way or another reflects the degree of financial education, responsibility, credibility and suitability to assume major commitments, when acquiring a loan.
Is it possible to acquire a loan without a credit history?
Until very recently it was practically impossible to acquire a loan with no credit history. Traditional banking exercised total control over financial services in the world. However, in recent years new modalities have been introduced to access a loan. This despite lacking a credit history .
The era of technology has made it easier for people to opt for different forms of financing even online. This without having to go to the bank, being able to request it completely online and it is not necessary to be with a bank organization of the already known ones. This is how new companies or startups that combine finance with technology called Fintech provide online credits. This allows the process to be easier without having a credit history .
This, of course, does not exempt some requirements and informative data that ask anyone who intends a loan. This to determine your ability to borrow and willingness to pay. This type of loans tend to be moderate and accessible. These can be used for any purpose such as paying for studies, to go on vacation with the family, among many other possibilities.
Lacking a credit history and choosing a loan, interest will be more expensive. This is because the entity does not have information that makes you a reliable debtor. These types of organizations have become very popular among market sectors. These organizations were considered forgotten by the traditional banking system.
The Dynamics of Credit History
It is a safe system and one of its features is that it is more flexible than a traditional loan. This is because the possibility of entering the financial system is really cumbersome for some people. These people, lacking credit history , do not meet the necessary requirements to do so.
This type of loan is used most of the time to meet unforeseen needs or small ventures. These investments allow its recovery in the short term. The amount approved for the loan is proportional to the income of the applicant. The bank evaluates if it will be able to make the payments according to its economic possibilities. Basic requirements are also requested such as identity document, age of majority and income verification.