How to establish credit with a no credit history

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » How to establish credit with a no credit history

How to establish credit with a no credit history


Updated: April 8, 2013

Add to Favorites:
Obtaining a credit card or any other kind of loan can be quite frustrating especially when you have no credit history. Establishing the initial credit history can also be quite tricky. When you don’t have credit, there are not too many places that will be willing to give you credit and then if no one is willing to give you credit, how will you able to establish credit, as you will have to start from somewhere. Firstly, it is important to understand what the lenders are looking for.  Now if you are looking forward to establishing credit for the very first time, then what can lenders possibly look for? They cannot look at your FICO score to determine if they can lend you money or not.  In such situations, they will be examining the other factors which will help them make a decision if lending will be risky or not. Bank Accounts:  One does not need a credit score to open a checking account at the local branch. Since these accounts don’t require any credit to open an account, they don’t get reported to the credit bureaus.  However, your account history could play a vital role as lenders will consider this when you wish to apply for a credit card or avail loan for the first time. Employment History: The most important factor that lenders will look into is your employment history. They will want to see if you can hold on to a job, or if you keep shifting. They will also look into periods of unemployment. Holding on to a steady job will help in getting approvals easily. Residence history:  Lenders will be interested in seeing if you move house very often, if you rent a place, or if you own a home.  This is probably as important as the employment history.  It does pay to have a permanent residence. Joint ownership of a home along with a spouse also holds well in most cases. Utilities in your name: It is possible to have many utilities in one’s name even without having a credit history. Having a telephone connection, gas, electric, cable or water connection in one’s name is also of great benefits. This will not be used to establish a credit score, but it will certainly help first-time borrowers. Starting with the bank is always a good idea to establish credit.  Opening a checking or a savings account in a bank has dual benefits such as: • If you have a good standing in any of the bank accounts that are active, then you are sending the message that you are responsible enough to manage money. These bank accounts are not necessarily part of your credit score but lenders could use this bit of information to come to a conclusion if you are a credit risk or not. • If you have a good rapport with the bank it helps in improving your chances of obtaining a credit card or a loan through them as they will value your business with them.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products’ Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

How to Earn on Black Friday Deals in 2017

How to Earn on Black Friday Deals in 2017

Posted: November 23, 2017

Black Friday is around the corner! Ready, steady, go! But before you go on a shopping spree to catch the jaw-dropping deals and discounts, make sure you maximize them. Did you know that you can not only save on Black Friday, but also earn? ... Continue reading
Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2017: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 20, 2017

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
Top 5 Cards for Travel from Our Partners Autumn 2017 – Expert Choice

Top 5 Cards for Travel from Our Partners Autumn 2017 – Expert Choice

Posted: November 8, 2017

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading