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Bad Credit, No Credit, Good Credit: Who can Get an Online Loan?


Most of us are feeling the pinch right now.

Canadians face high inflation, and you’ll notice that every time you do your weekly grocery shop. So like many Canadians, you might be considering a loan to help you through this rocky period.

However, you probably know that your ability to borrow depends on your credit score. But what doe this mean? 

In this guide, we’ll help answer that question. We’ll explain the difference between bad credit, no credit, and good credit. And we’ll show you how anyone can get an online loan, whatever your credit situation. 

Credit Scores: A Brief Overview

A credit score is what lenders use to determine whether you’re likely to pay back a loan. It’s a bit like a scorecard but for finances.

Credit scores are overseen by independent third parties called credit agencies. They’ll track all your financial information and use that to give you an objective score.

They look at what you owe, your payment history, and the type of credit you have.

You will likely have a good score if you have always paid everything on time and don’t have high debt levels. If you are often late with payments, and debt is a large percentage of your income, it’s probably the opposite.

What It Means to Have a Bad Credit Score

Bad credit scores typically happen when you have an imperfect credit history. The most common reason is missing payments on bills. It could be your utility bill, a credit card debt, or a car loan payment.

You could also have a bad credit score if you’ve hit the ceiling on your debts, which means maxing out your credit cards or having multiple loans.

In Canada, you’ll get a numerical value that indicates your score. If that figure is under 600, you have a bad credit rating.

For a lender, that makes you a risky borrower, and you have a higher chance of defaulting on a loan.

The good news about credit scores is that they change every month. So a bad score isn’t the end of the world. There is much you can do to improve it.

No Credit: What It Means

It’s tempting to think that credit scores fall into bad, okay, and good categories. But another type surprises some people; it is a relatively common one. That’s the no-credit score.

The no-credit score is for people who don’t have enough financial history for a credit agency to supply a score. It will happen with young lenders or anyone who has never applied for a loan.

When that happens, you are an unknown entity to a lender, which makes you as risky as someone with a bad credit history.

Yet there is an upside to this. It’s important to remember that everyone starts here. It’s easy to build your credit rating starting from scratch.

Achieving a Good Credit Score

Your ultimate financial aim should be to achieve a high or good credit score.

In Canada, that’s usually a numerical score over 700. The higher it goes, the more likely you will hit the “excellent” category. In that space, lenders view you as a reliable borrower.

Not only are you highly likely to get approved for a loan, but you’ll also get access to the best offers and lowest interest rates.

You’ll also have higher borrowing limits and find loan and mortgage applications smooth sailing.

Getting into this category requires excellent discipline with your finances. You must borrow wisely, not overstretch yourself, and always pay on time.

Online Loans: An Alternative to Traditional Bank Loans

Online loans have reshaped the finance market, taking a healthy share of lending away from traditional banks.

There are plenty of advantages. It means you can do everything via one online form, and it’s often quicker.

Plus, you can compare and contrast many loans at the click of a button. So it’s easier to find one with an attractive interest rate that meets your needs.

Applying for an Online Loan

You’ll need to meet specific criteria when applying for an online loan. For a start, you must be over 18, and lenders will require a Canadian address.

Lenders will examine your credit score once you’ve met this basic criterion.

However, there are many different lenders, and they don’t always have the same credit requirements for loans. That means that it’s possible to find finances that fit your circumstances.

If you have bad credit, you will still find loans online that meet your criteria. It’s important to remember that the lender will need to know that you can repay that loan, so they’ll examine other factors like your income.

Loans for poor credit often have a higher interest rate to offset the risky nature of this lending.

At Tekaloan, we offer short-term loans that don’t require a credit check. So this is a viable option for anyone needing money fast, whether you have a good, bad, or no credit score.  

How to Improve Your Chances of Approval

To secure a loan, you must take steps to become a reliable borrower. First, create a household budget. If you have debts, consider lowering your expenses to help pay bills on time.

Check your report for errors. Sometimes a mistake on your credit record can harm your score. A steady income will help you improve your lending credentials too.

Avoid taking out large loans and making too many loan applications in a short space of time.

If you lack a credit history, consider a small, short-term payday loan to help you build credit. You’ll improve your credit score once you demonstrate your ability to repay a loan on time.

Getting an Online Loan With Any Credit Score

Getting an online loan is straightforward if you have a good credit score. However, if you are in the other two categories of a bad or no credit score, don’t despair. You have choices.

Start right here by applying for a Tekaloan. We don’t run a credit check, so our fast loans could be your ideal option. 

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