How to Start with No Credit History and Build One

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How to Start with No Credit History and Build One

If you do not have a credit history, it is virtually impossible for you to get a loan, job, credit card or any other benefit which checks for a person's creditworthiness. It is very possible to have no credit history or a bad credit history. But with some planning, resolve and clever moves, you can improve your credit history. It might be strange to hear but some people take loans only to improve their credit history. Once they get a loan based on a salary slip or any other criteria, they can improve their credit history very fast by paying monthly interest payments diligently and ensuring that they are consistent in their payments. It is hard to get credit card if you have no credit history. But you can request for an american express card where there is not revolving credit or a secured credit card in which you are taking the card by securing another asset. Although this is risky, if you pay your monthly payments on time, you can improve the credit history very quickly. You can open a checking account or a savings account and maintain some minimum balance. Most lenders will look at your account report to see how much money there is and how you manage the money. Similarly an account with a long history helps improving your credit score and hence one shouldn't close down old accounts unless it is really justified. There are other smart ways of building upon on your credit score. One of them is to ensure that your telephone bills, electric bills etc. are all in your name and that you don't default on payments of any of these. You should always do them on time to ensure that there are no bad remarks on your credit history. Late fee and missing on monthly payments often brings down your credit score. Applying for gas station cards, store cards etc. in cases where the stores report to the credit bureau can be a smart way of building your credit history. By making transactions on those cards, which are easier to obtain than the normal credit cards, and then paying off the balance before time, you can ensure that your credit score improves fast. You can also ask your parents or guardian who has a good credit score to add your name to their cards so that the history reflects on you as well. Taking up a cosigner who has a great credit history can be a great advantage to improve your credit history. Many credit card companies go to college campuses and then advertise their cards. Since you are a student you can get a credit card with very low credit limit. However, if you take your card and keep making monthly payments on time by using the card, you build a decent credit history on which you can build on later by taking another card with higher limit and continuing to be consistent in paying off the balances.

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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.
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