NEW YORK CITY, NY / ACCESS Newswire / September 16, 2025 / Getting a loan can be challenging for those who have a limited credit history. Without proof that they can reliably pay their debts, potential borrowers face some roadblocks when seeking credit.

Having limited credit doesn't disqualify an individual from getting a loan, however. There are several steps potential borrowers can take to improve their chances of getting approved so they can get the funds they need for emergency expenses, a large purchase or even debt consolidation.

1. Check your credit report

When deciding whether to approve a loan, lenders want to know how risky the borrower might be. One tool lenders use to evaluate risk is the borrower's credit report. Before applying, a borrower can request their own credit report at AnnualCreditReport.com and see whether they have any late or missed payments, fraudulent activity or other problems with their credit. If there are issues, a borrower can gradually improve their credit score over time by correcting any mistakes on their credit report, paying off outstanding debts and ensuring they make all their debt payments on time.

2. Seek prequalification

A would-be borrower can save a lot of time by prequalifying for the loan they're interested in. Most lenders offer the option to prequalify. With prequalification, the lender will initiate what's known as a soft credit inquiry to determine whether the applicant meets the lender's basic criteria for a loan. A soft inquiry will not affect the consumer's credit score.

3. Add a co-signer or co-applicant if possible

Adding a co-signer or co-applicant with stronger credit can improve a borrower's chances of getting approved for a personal loan. The co-signer agrees to take on the responsibility of repaying the loan if the primary borrower defaults. A co-signer can be a family member, close friend or business acquaintance. A co-applicant has similar responsibilities to a co-signer, but they also have access to the loan funds.

4. Apply for a secured loan

A secured loan is a personal loan that requires collateral. Collateral helps mitigate the lender's risk. Collateral is something of value, such as a car or a house. Lenders may have different requirements about what kind of collateral is eligible. If the borrower defaults on the loan, the lender could take the collateral. If the value of the collateral doesn't cover the cost of the loan, the borrower may still be responsible for making up the difference.

The Bottom Line

A limited credit history or low credit score shouldn't prevent anyone from applying for a personal loan. Borrowers can take certain steps to improve the chances of loan approval. They include checking their credit report before approaching the lender, getting prequalified, finding a co-signer or co-applicant, if possible, or applying for a secured loan.

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OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.

CONTACT:

Sonakshi Murze
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sonakshi.murze@iquanti.com

SOURCE: OneMain Financial