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It is virtually impossible to get any bank work done without a credit History these days. Most banks require a credit history record along with the other personal details of the customer. Credit histories are mostly used to check the risk quotient of a customer who has submitted a loan application. What does one do if one has no recorded credit history available?
If one has had any pervious bank dealings, there will be some form of a credit History. It is highly unlikely that a person who engaged in financial transactions will be left without any proof of it. However, students rarely have credit histories. This becomes a point to consider when such a student applies to a bank for a bank loan to fund education etc. Some banks sanction loans to students without the mandatory requirement of a credit History. But more often than not, the student will be required to bring along a co-signer who has a good enough credit history for the sanction of the loan.
Some financial experts believe that no credit history is better than a bad one. This is true to a large extent. In case there is no recorded credit history the bank or financial agency may inquire into the reason behind the absence of one. For the applicant in question is a student, the lack of a credit History is understandable and the bank may have provisions through which one can find a solution to the problem. Being a first time bank user is usually the only excuse that most banks accept. Like mentioned above a co- signer with a credit history is required under these circumstances. The loan amount is sanctioned based on the strength of the credit history of the co-signer.
It must be mentioned that a good credit history takes a long time to establish. It is not a record that can be formulated in a day. Years of regular payments will lead to a good credit history. For those without a credit history, other personal details become important - such as employment records if any, residence records (which may include letters of recommendation from the landowner etc) as well as a list of the personally owned valuable assets( moveable and immovable). These details can give a fair account of the financial status of the applicant and whether he or she will be able to repay the loan amount under those given circumstances. Submitting records of bank accounts is a useful way to establish a credit history.
