Establishing a good credit history in the us from scratch
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Credit Card Applications » Research » Guides » Building Credit History » Establishing a good credit history in the us from scratch

Establishing a good credit history in the us from scratch

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The credit history of each and every individual is linked to the social security number.The credit history of an individual basically reveals certain facts with regard to availing loans/credit, making payments on time, delayed or missed payments, defaults on loan etc. Having no credit history or a bad credit history is detrimental to an individual's overall creditworthiness. Not only will the person be unable to avail a loan but it would be impossible to rent an apartment, find employment, get credit facilities or cards, phone, electricity etc. Blotches in one's credit history generally last for a period of seven years. Sometimes a credit card can be obtained in the U.S. only after having lived there for at least a period of six months. One might find credit card companies sending mail to a recipient but it is not necessary that the approvals have been made. An individual is expected to furnish all the necessary documents in order to avail the card. The creditworthiness of an individual should be determined only on the basis of repayment capacity, willingness to pay on time, etc. There should be no other discrimination to deny an individual credit. Even in case the credit facility is denied the lender must explain in detail the reason for the denial. One is entitled to one free credit report on each denial. One must open a savings or a checking account immediately. This is the first step and this could be followed by applying for a credit card. Bank accounts are signs of stability and lenders definitely go by that. One must ensure that checks don't bounce and always limit withdrawals and one must avoid overdraft at all costs. Although bank accounts are not part of credit history it is still important as the lenders could actually get a glimpse of how well the individual is able to manage the money. When there is no credit history, lenders will look at other factors such as he employment records. It is advisable to stick on to jobs for a certain period. Frequent job changes don't go down well with lenders. A steady job with a good salary is an added advantage. Long periods of unemployment could adversely affect the credit rating of an individual. Getting a store card is also beneficial. However, while applying for a credit card one must ensure that the card reports to the credit bureau. Otherwise it would be a waste to get that card as it would not serve the purpose of building a credit history. Always ensure that applications for too many cards are not sent at once. Whenever there is an application for a card, the report is sought from the credit bureau with regard to the credit history etc. There are entries known as "hard" entries as well as "soft" entries. The hard entries are made when the borrower applies for credit and the soft entries are made when the lender offers credit. So the more the number of hard entries the credit scores are likely to go down that much further.

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