Most people need credit at least once in their lives. It could be for purchasing a house or a car, etc. or to pay for unexpected medical expenses. However, in any case, one of the most common concerns of a person is usually their CIBIL score, especially when they are unemployed. In this article, we will discuss the very same aspect.
While it's true that having employment can greatly up your chances of obtaining a credit card or a personal loan, etc., you don't necessarily need it get credit.
There are many students who apply for credit and get the same even when they don't have employment. The reason is that we all have to start somewhere. Think about it- when a person gets a credit card for the first time, their credit history has to be blank. If it was mandatory to have a credit history or a good CIBIL score for every individual, most of them won’t even qualify.
So, to put it simply- yes, it's possible to get credit even if you are unemployed. However, this doesn't mean that it's easy.
A person who has never been on a loan defaulter list and has an excellent credit history will never have a problem obtaining credit. This is because he has a credit report to prove his creditworthiness. However, a person with a clean slate i.e. no credit history can't easily prove how well he can repay his debt.
If you are unemployed and have no credit history, then you needn't worry. You can still get credit by:
One of the best ways to get credit is by applying for a secured loan or a secured credit card. This is because in these the risk is much smaller for the lender.
For a secured loan,one can offer your house or another asset for collateral. Similarly, for a secured credit card, you have to deposit a security amount (which is usually equal to the credit limit provided on the card).
A big advantage of using a credit card is that you can also build a high CIBIL score if you use it properly i.e. pay the bills on time and avoid making it to the defaulter list. It will help you get credit in the future easily and quickly.
If you are having a hard time getting your loan application approved, then the chances can be improved with a joint loan instead. You can ask a family member or a close friend who has a good credit history to become a co-borrower. In this way, their creditworthiness can make up for your lack of credit history.
Another way to get a loan easily is by taking the help of a loan guarantor. As the name suggests- a loan guarantor is a person who takes partial responsibility for the repayment of the loan that you are applying for. This makes a bank more comfortable in approving your loan application.
A bank will certainly have its doubts when you are unemployed. However, if you can somehow convince them that you will repay, they just might change their opinion. For instance, if you have made investments that provide returns, you can show their details. Similarly, if your spouse is earning a decent income that's enough for paying for your and their lifestyle expenses along with the loan EMIs, then also one can get credit.
Having a good credit history is usually the norm for getting a loan or a credit card from most traditional banks. However, if you don't have it, you can still get credit if you are prepared by applying the suggestions given above.