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Best way to get a small loan with excellent credit but a very thin file.

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New Member

Best way to get a small loan with excellent credit but a very thin file.

Hello everyone and thank you for your help. I am currently looking to purchase inventory for a business I plan to start. I need less than $10k to get started. I have excellent credit (FICO score 8 748 Experian) I've only had to pay interest once in my life. I've always spent what I can afford and paid everything off on time in full. I've never even been late on rent. Problem is, my file is thin. Unlike most young adults, i decided not to open a credit account since I was a reckless spender. So my credit history only dates back for 3 years. So my question is, is there ANY WAY I can be approved for a small personal loan to fund a business idea (business not yet established) even though I have a thin file. If so, what is the best way of getting approved without use of a Co-signer.
Thanks!
4 REPLIES 4
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Valued Contributor

Re: Best way to get a small loan with excellent credit but a very thin file.

I'm not really sure of the answer, but if it was me. I would approach my own bank about this one. If you have been banking with them for a while, they are more open to taking chances as you do have a history with them. A small business loan may also be an option, but you may want to save that one for later

Started Rebuild 4/2018: EX 616| TU 604| EQ 621

Current 5/28/20:


First Goal Score: 750+ Reached 3/2019

Next Goal all over 800
Message 2 of 5
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Established Contributor

Re: Best way to get a small loan with excellent credit but a very thin file.

When I was in the market for a personal loan I found a lot of banks will have an online calculator. Simply enter a score range, the loan amount and the payment terms. Based on the info provide they will give you an estimated APR.

Keep in mind your DTI, not just score, will also determine the loan terms and amount you can borrow.

Anyway I don't see a thin file as a reason for denial, many of us obtained massive student loans with a very thin file.
Message 3 of 5
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Established Contributor

Re: Best way to get a small loan with excellent credit but a very thin file.

What cards have you been putting spend on and pif? If they offer loans, I would look there first. I put alot of business spend through amex while pif and they sent a loan preapproval. The bank i use to pay my cards has sent offers too.
So i suggest looking where you already have a relationship.
2019 Spend Summary
$944,008 Amex BRG
$91,953 Amex SC
$58,351 Discover It
$50,046 BofA CR
$36,146 Amex PRG
$6,774 Cap1 QS
$963 Amex CM

$1,188,241 Yearly Spend
Message 4 of 5
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Super Contributor

Re: Best way to get a small loan with excellent credit but a very thin file.

Lenders make their decision based on credit score, income, existing debt, the amount you wish to borrow, and whether there will be something used to secure the loan (e.g. an auto or home loan involve the bank owning the car or house until you pay the loan off).  Business loans can be based on additional factors, such as an impressive business plan.  Length of history with a bank can also matter I imagine, as others suggest.

 

Note that I separate income and existing debt, rather than combining them as DTI.  A homeless man with almost no income might have no debt and therefore an impressively low DTI, but no lender will give him a dime because of his low income.

 

If our OP wants to improve his credit score (one of the things the lender will look at) I can direct him to a place on the forum he can do that.  He uses the phrases "very thin file" which he seems to be confusing with Age of Oldest Account.  AoOA is important, but it is completely different from what makes a profile thin. 

 

Ceratinly he should tackle making his credit reports and scores as good as possible in the next couple months.

 

If he describes his annual income for the last two years, current monthly income (last two months), existing debt, and whether he'd be securing the loan in any way, the other folks here might be able to advise him.  I have never taken out a real personal loan before (or a business loan) so I can't comment about what's involved there.  I can help with the score piece.

Message 5 of 5
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