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If you need a loan, a credit check is typically part of the application process. But what if you have no credit score and no credit history?

Maybe you’re a student, a young adult just starting out in your career, or a newcomer to Canada, in which case you might not have had a chance to establish some credit. While it might be more difficult to get a loan without credit, there are loans and lenders out there that can cater to your situation.

Here is what you need to know about no credit score loans.

Can You Get A No Credit Score Loan In Canada?

An important factor for loan approval is the borrower’s credit. The higher the credit scores, the better the odds of loan approval at a lower interest rate.

A poor credit or no credit doesn’t stop you from getting a loan. These lenders look at other factors in place of your credit scores, such as your employment status and income level.

What Do You Need To Get A No Credit Score Loan? 

If you can prove that you have a steady job, a healthy income and manageable debt, you may be able to qualify for a loan with no credit. Keep in mind that you won’t find these types of loans with conventional lenders, such as banks and credit unions. Instead, these types of loans are available with alternative lenders.

Borrow Up To $50,000


Types Of Lenders That Offer No Credit Score Loans

There are plenty of places to look to get your hands on a loan without the need for a good credit score, or any credit at all:

Credit Unions 

If you’re a member of a credit union, there might be some options available to you even if you have not had the chance to develop a strong credit profile just yet. Credit unions work to keep loan interest rates low for their members, so you may have better luck with this type of financial institution than a conventional big bank.

Online Lenders 

Online lenders are readily available these days and often offer loans to those who may otherwise be unable to secure a traditional loan from a conventional lender. These lenders use alternative data and modern technologies to assess your creditworthiness and look at a wider variety of factors aside from your credit scores. Not only will you have an easier time getting approved for a loan with an online lender, but it can also help you build your credit.

Payday Lenders 

Loans from payday lenders should be your last resort. These short-term loans are very easy to get approved for and only require that you have a steady income. Plus, the application and approval process is very quick, and funds allocated to you within a day or two.

However, payday loans are very expensive. Interest rates are sky-high, with APRs in the triple digits. Further, you’ll have just a couple of weeks to fully repay the loan (plus interest). 

Note: Payday loans are extremely expensive and can lead to a cycle of debt if you’re unable to repay the full amount borrowed. To Learn about the payday loan laws in your province, click here.

Can You Get A Loan Without A Credit Check?

While conventional lenders typically conduct a credit check as part of the loan application approval process, some lenders don’t. You can find lenders throughout Canada who provide financing without a credit check. Meaning you don’t need a good credit score — or any credit at all — to get approved for a loan.

These no credit check loans simply require other credentials in lieu of a credit check, such as bank statements to verify your assets, pay stubs to determine your income, and a statement of expenses to show how much debt you currently carry. You might also include a co-signer or add collateral to back the loan to reduce the lender’s risk and boost your odds of loan approval.

Just keep in mind that you may be charged a higher interest rate for a no credit check loan.

Can You Use Crypto As A Security For A Loan? 

A crypto loan uses digital currencies to back the financing. That means if you default on your loan, the lender may have the rights to your cryptocurrency as a way to recoup their losses. As long as you have crypto to use as security for your loan, you may not require a credit score to get approved.

Where Can You Get A Loan With No Credit Score?

Amount Interest Rate Term Province Availability
Loans Canada Logo
Loans Canada
Up to $50,000Prime to 46.96%4 - 60 monthsAcross Canada Learn More
Up to $1,500Varies by province*Max 62 daysBC, AB, MB, ON, NB, NS, PEI Learn More
Captain Cash
Captain Cash
$500 - $750Varies by province*90 - 120 daysBC, AB, ON, NB, NS, PEI, NL Learn More
Cash Money
Cash Money
Up to $1,500Varies by province*Up to 62 daysBC, AB, ON  Learn More
Up to $1,500Varies by province*Next paydayBC, ON Learn More
Money Mart
$120 -  $1,500Varies by province*Max 62 daysBC, AB, SK, MB, ON, NS Learn More
Pay2Day logo
$50 - $1,500Varies by province*Up to 31 daysBC, ON, NS Learn More
Instant Payday Canada
Instant Payday Canada
Up to $1,500Varies by province*Up to 60 daysBC, AB, ON, NS Learn More
*The maximum borrowing cost for a payday loan varies by province, learn more here.

How To Increase Your Chances Of Getting A No Credit Score Loan

Even without credit, there are several ways to ensure your loan application is approved:

Increase Your Security 

One of the best ways to improve your chances of getting approved for a loan when you have no established credit is to reduce the lender’s risk. The higher the risk for the lender, the lower your chances of loan approval. Here are a few ways you can reduce your lender’s risk: 

  • Add an asset of value to the loan as collateral. In the event that you default on your loan, the lender can repossess the collateral you put up to back the loan. The lender can then sell the asset to recoup any losses suffered. Collateral reduces the risk for the lender, who may give you a better rate as a result. Assets often used as collateral include vehicles, homes, and investments.
  • Find a co-signer. A co-signer is someone with good credit and a strong income who agrees to take over your loan payments if you fail to make them yourself.

Apply For A Smaller Loan Amount

Smaller loan amounts are not as risky for lenders, which means you’ll have better luck getting approved. The less you owe your lender, the less they have to lose if you default on your loan payments.  

Reduce Your Expenses 

Even if you earn a very healthy income, you still may not have much left over if your current debt obligations are high. The more you owe in debt payments, the less money you have available to cover another loan payment.

Lenders want to make sure that you have enough money every month to make your loan payments. Consider taking some time to pay down your existing debt before applying for a loan to lower the risk for the lender and increase your chances of loan approval.

Make Timely Payments 

If you already have some debt, make sure your payments are made on time and in full each billing period. This includes your utility bills, cell phone bills, subscriptions, and rent.

How To Build Credit If You Have No Credit?

While there are loans available for those without credit, you should still take steps to establish a strong credit profile so you have more financial products available to you in the future. Here are a few ways to build good credit if you’re starting from the ground up:

Take Out A Secured Credit Card

Having a credit card and making timely payments every month is one of the best ways to build and improve your credit. But without any credit history, it can be tough to get approved for products like credit cards. 

Secured credit cards are much easier to get your hands on and don’t require strong credit scores to get approved. These types of cards act just like conventional credit cards, except you’re not putting anything on credit.

Instead, you’re required to make a deposit, which serves as your credit limit. This security deposit is held by the creditor while the account is open. 

Paying your secured credit card bills on time and in full each billing period can help build credit since payment history is one of the most important factors that affect your credit scores.

Apply For A Credit Building Loan 

Your financial institution may offer a credit building loan, which deposits money into your savings account and draws from it for payment until the loan is fully repaid. Again, the goal is to always make timely payments to build a strong credit profile.

Become an Authorized User

If someone you’re close to has a credit card, ask to have your name added as an authorized user. Credit card companies report the account history on an authorized user’s credit report. Meaning that if the primary cardholder is making timely payments, this will reflect well on you. You don’t even have to use the card to take advantage of this perk.

Just be sure that you can trust the authorized user to make sound financial decisions with the card. 

Adopt Better Financial Habits 

There’s no better time than the present to start practicing good financial habits. Everything you do with your finances can potentially impact (directly or indirectly) your credit scores, so make sure you’re responsible with your finances starting today. This includes paying your bills on time and in full, avoiding taking on too many loans, keeping your debt under control, and having an emergency fund.

No Credit Score Loan FAQs

Can I build my credit scores with a payday loan?

No, it’s also important to understand that most payday lenders do not report loan payments to the credit bureaus, which means your credit profile will remain unchanged even if you’ve managed to get approved and pay the debt off on time.

Why do lenders look at credit scores?

If you have a good credit score, that usually means you’ve been responsible with your credit accounts, have paid off loans in the past and make timely debt payments. Lenders prefer to work with consumers with good credit scores, as it minimizes their risks. 

Can I get a car loan with a zero credit score?

No matter how poorly you’ve managed your finances, you won’t have a credit score of zero. Credit scores range from 300 to 900. If you are a student, young adult, or newcomers to Canada then it is typical that you may not have a credit score as of yet. If you have no credit, there are alternative lenders available that cater to specific demographics who are just starting to establish a credit history. And if you have poor credit due to mismanagement of your finances, there are lenders who may be able to help you as well.

Can I get a car loan with no credit score?

Yes, you may be able to get a car loan without credit from an alternative lender that offers no credit check loans. However, your options may be limited and you’ll likely be paying a higher interest rate. Otherwise, consider getting a co-signer to sign on a loan with you.

Where can I get a fast loan without a credit score?

The fastest loans available to those with no credit score are payday loans. You can get approved with minimal credentials and get funding within hours. However, payday loans should be a last resort, as they are very expensive and difficult to pay. Moreover, they’re typically due within a couple of weeks which can add additional stress to your budget.

Final Thoughts

Having a good credit score always makes it easier to get approved for a loan. But if you don’t have credit just yet, take a look at what alternative lenders and loan products are available and if they cater to your situation.

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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