Credit range
No Credit History? How to Borrow, and How to Get a Score
Having no credit isn't the same as having bad credit, but many lenders' systems can't tell the difference. Here is how different lenders handle a thin file, what a first loan costs, and the lowest-cost ways to build a record.
By Lendmira Editorial Team Updated 8 min read
- Score range
- No score or too thin
- Typical APR
- 18%–36% (roughly)
- Adults with no credit file
- About 7 million (2020)
- Credit-builder loans
- Often $300–$1,000
The short version
With no credit history, some lenders decline automatically, while others price you roughly like fair or poor credit, about 18% to 36% APR, or ask for a co-signer. A $2,000 loan over two years at 27% costs $108.76 a month and about $610 in interest. If you don't need the money now, a credit-builder loan or a secured card builds a record for far less.
No credit isn't bad credit, but it's priced like it
Some people have no credit file at all; the CFPB estimates that about 7.0 million adults, or 2.7%, were "credit invisible" in December 2020. Many more have a file too thin or too old to generate a score: the same CFPB analysis counted unscored records at 9.8% of adults that year. Students, recent immigrants, people who have always paid cash and people coming back to credit after many years are the usual cases.
Lenders handle a thin file in very different ways, which is why there is no single price for it:
Automatic decline
Lenders that rely on a minimum score can turn the application down before a person ever looks at it. A decline like this says nothing about whether you can repay.
Priced like fair or poor credit
Lenders willing to take the risk often quote toward the upper half of the market, roughly 18% to 36%, and may lower the amount you asked for.
A look at other information
Some lenders weigh income, employment and the history in your bank account instead of a score. Ask whether a lender considers these before you apply.
Approval with a co-signer
Many lenders will approve the same application if someone with an established record signs too.
What a first loan typically looks like
| APR | Roughly 18%–36% if approved; lower with a co-signer or collateral |
|---|---|
| Amount | Small to start; lenders limit their exposure until you have a record |
| Term | Shorter terms are common |
| Approval odds | Vary widely by lender; better at credit unions you've banked with and with a co-signer |
The range is an estimate: Lendmira uses the fair and poor credit ranges as the closest guide, because that is roughly where lenders that accept thin files price them. Your own offer depends on your income and on how the lender treats files without a score.
The math: $2,000 over two years
At the middle of that range, $2,000 at 27% APR for 24 months means $108.76 a month, about $2,610 in total and roughly $610 in interest. Here is what the ends of the range, and a co-signer, can do to the same loan:
| APR | Monthly payment | Total interest |
|---|---|---|
| 18% (for example, with a co-signer) | $99.85 | $396 |
| 27% | $108.76 | $610 |
| 36% | $118.09 | $834 |
Check your own numbers in the loan payment calculator before you apply, and keep the amount small: your first loan is mostly about proving you can pay.
Building a record before you borrow
If the money can wait, start with a product designed to create history. The two most common are a credit-builder loan and a secured credit card.
- Credit-builder loan. Offered by many credit unions and community banks. The lender puts the loan amount, often $300 to $1,000, into a locked savings account; you make monthly payments, the lender reports them to the three major credit bureaus, and you get the savings back at the end, minus interest and fees.
- Secured credit card. You put down a deposit that usually becomes the credit limit, then use the card lightly and pay it in full. Funditia explains how secured cards work.
- A credit union membership. A checking account and a short history with a credit union can make its small loans easier to get later, including a payday alternative loan, which federal credit unions cap at 28% APR.
Borrowing with a co-signer
A co-signer with an established record can get you approved and move your rate toward the low end of the range. It's a serious favor. The FTC's required notice to co-signers warns that they may have to pay the full amount if you don't, plus late fees and collection costs, and the loan can appear on their credit report as their debt.
- Agree in writing on what happens if you can't pay a month.
- Give the co-signer online access or copies of statements, so a problem never surprises them.
- Ask the lender whether it offers a co-signer release after a run of on-time payments.
Cosigners and co-borrowers covers the difference between the two roles and what each signs up for.
What to avoid when you're new to credit
- Lenders that advertise they don't check credit. They make up for the risk with price; payday loans can run to an APR of almost 400% on the CFPB's example of a $15 fee per $100 over two weeks.
- Fees before you get the money. The FTC says any upfront fee a lender wants before granting a loan is a cue to walk away. Read the warning signs in loan scams.
- Borrowing more than you need to build credit. A small amount paid on time builds the same record as a large one, at a fraction of the interest.
- Applying everywhere at once. Each formal application is a hard inquiry on a file with little else in it. Prequalify with a soft check first.
From no score to a fair or good one
- Open one credit-building product and set up automatic payments.
- Check your credit reports after a few months to make sure the account is being reported.
- Add a second type of account only once the first is running smoothly.
- Follow a plan. Funditia's guide on how to build credit covers how long it takes to get a score and what helps it grow.
Once you have a score, see where it puts you: fair credit starts at 580 and good credit at 670.
Common questions
Can I get a personal loan with no credit history?
Sometimes. Some lenders decline applications without a score, while others look at income, employment or bank account history, or approve you with a co-signer. Expect a smaller amount and an APR roughly in the 18%–36% range.
Is no credit worse than bad credit?
Not necessarily. You don't have missed payments to explain, but many lenders can't score you, so you may be priced or declined much like someone with poor credit until you build a record.
What is a credit-builder loan?
A small loan, often $300 to $1,000, that the lender holds in a locked savings account while you make payments. The payments are reported to the credit bureaus, and you get the money at the end, minus interest and fees.
Does a co-signer help me build credit?
Yes, if the loan is reported in your name and you make every payment on time. Any late payment hurts both of you.
Sources
- Consumer Financial Protection Bureau — Technical correction and update to the CFPB's credit invisibles estimate (June 2025)
- Consumer Financial Protection Bureau — Credit builder loans: ideas for financial educators and practitioners (2020)
- FTC Consumer Advice — Cosigning a Loan FAQs
- FTC Consumer Advice — What To Know About Advance-Fee Loans
- Consumer Financial Protection Bureau — What is an APR and why is it higher than the interest rate for my payday loan?
- eCFR — 12 CFR 701.21, loans to members (payday alternative loans)
Facts on this page were checked against these sources on October 13, 2026. There is no official APR range for borrowers without a score; the 18%–36% estimate combines Lendmira's fair and poor credit ranges.
What a first loan with no credit history could cost you
The numbers below are a typical starting point. Change them to match the offer in front of you, then see what lenders would actually quote.
For every $1 you borrow, you repay —. An example, not an offer: your APR depends on your credit, income and state.
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Keep reading
-
Guide
Cosigners and co-borrowers
A cosigner can owe the full balance, fees included. What the required notice says and how to get released.
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By credit score
Fair credit
Scores of 580–669: APRs of about 18%–30%, wide offer spreads, and when a loan beats your card.
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Loan type
Payday loan alternatives
Credit union PALs up to $2,000 at 28% APR or less, paycheck advances, payment plans and local help.