Did you know that nearly 64 million people in the United States have no credit score? People who do not have a credit score are often those who have not had an active credit account or loan during the previous six months. These types of borrowers are often seen as risky investments for banks, but new research is showing that they may be more financially secure than they appear.
Many people with sparse or no credit history are recent immigrants or recent college graduates - both often in need ofcredit of some kind to get on their feet and build a life.
Lenders like borrowers who have a solid enough credit history to indicate that they will pay all or most of the loan back, but who still have some hiccups in their past that prevents them from getting the best possible rate. These types of priorities are hardly news coming from the nation's big banks, which is why many people opt for a loan from a friend or family member or other informal source, rather than run the risk and endure the stress of a corporate loan.
As many Michigan borrowers know, taking out a loan with a bank or a payday lender can help make ends meet when times are tough, or can help finance a large purchase when the time comes to get a new car or a home. However, these types of loans also come with risks for the borrower, particularly if they are unable to pay on time, lose their jobs, or experience an accident or illness that becomes costly. The fact is, there are many extenuating circumstances that could cause people to fall behind on their payments. When that happens, there are a variety of debt relief options available to help borrowers get back on their feet.
Source: CNN, "Millions without credit scores not so risky after all," Blake Ellis, Aug. 14, 2013.