An individual's credit history is a reflection of their activity not only with regards to finances but also as it directly relates to personal responsibility. Credit histories provide valuable insights into purchasing behaviors, the amount of debt someone is comfortable carrying any one time, the types of loans they assume as well as their ability to repay those outstanding debts. Needless to say, credit history affects all aspects of an individual's current and future financial endeavors. Without established credit it is almost impossible to obtain any kind of loan regardless of how trustworthy the individual is. There are however ways to initially obtain certain types of loans with no credit to get the ball rolling.
There are lenders such as banks and credit unions who understand that everyone needs to start off with a blank slate and build from there. The best way to convince an organization to issue you a loan is to gather together all of your financial information including pay stubs as well as banking statements and tax documents. This in and of itself won't get you alone but it will establish a firm foundation that you currently have income and will be able to repay at least some sort of small loan without the risk of default.
Even though you currently don't have any type of well-established credit history it is still prudent to get a free annual credit report as provided under federal law. The three major credit reporting agencies are required to provide one free credit report every 12 months. When trying to get a loan with no credit it is still good to have a current picture of your credit history to see if there are any inappropriate black marks or the possibility of identity theft. It's better to have no credit history than a credit history with black marks. If there are any errors be sure to contact the credit reporting bureaus with corrections and monitor the reports going forward.
Now with your paperwork in hand and an understanding of your current credit history you can try to get some sort of small loan. The two best ways to get a loan with no credit is to have a cosigner or use collateral. Neither of these are ideal situations because the cosigner will be just as liable as you should you default on the loan and collateral has the possibility of being repossessed. Since however your sole purpose is trying to get a loan to establish a credit history then if the amount is small it shouldn't be a problem for either yourself or the cosigner. Getting a relative such as a parent to cosign for a small loan in the range of $500-$1,000 should be doable and shouldn't put any party at significant financial risk. The same is true regarding a payday loan or title loan which can use a pay stub or automobile for collateral. The key to both of these scenarios is to take out a small loan when you don't need it and you have cash immediately available to repay it as this will minimize any risks of default and at the same time establish a credit history.
Many individuals will look at the wrong side of the problem and think to themselves how am I going to get a loan if I don't have any credit history. It's kind of a chicken and egg scenario in that you need a loan to get the credit history but you can get the credit history unless you're able to get a loan first. So the best way to tackle this problem is to start establishing credit early and often and pay back loans responsibly which will lead to bigger and better financial opportunities in the future. Before you know it you will be obtaining an automobile loan or possibly even a home mortgage with little effort.