The need for establishing credit history?
Advertising Disclosure is an independent, advertising-supported web site. 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. has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » Research » Guides » Building Credit History » The need for establishing credit history?

The need for establishing credit history?

Add to Favorites:
Having no credit history is the biggest problem in acquiring a new credit card or any type of loan. Even though you don`t have any credit history and not many companies are interested in offering credit, credit history can be established. In converting a zero credit history to an established credit history, lending institutions examine several factors to determine the capacity of the lender. Following factors are examined by lenders for establishing the credit history for providing the loan or credit card for the first time. Transactions of bank account: Credit history or non-credit score is not required to open a bank account. Transactions with the bank pay a vital role in determining the capacity of the borrower by credit bureaus. Maintaining the bank account in a proper standard proves that the borrower can manage money in proper way. Employment history: The major factor influences the credit score is the details of present and past employment. The lenders look into the factors that how long the proposed borrower hold a job, employment status, unemployment period if any, etc. A steady job with good records increase the chances of availing the good credit score. Apart from bank account, establishment of relationship with the bank will increase the chance of obtaining credit card or loan. The existing good relationships with bankers enhance the credit score. History of residence: Residing locality, rented or own premises, frequency of shifting the residence, etc are examined. Additional scoring will be added for the residence offered by stable employment or event for a joint possession of property along with the spouse. Utilities in the name of borrower: Many utilities can be registered in the name of borrower even with zero or no credit history. The utility may include electricity connection, gas connection, telephone, cable, water service, etc.; having a registration with these accounts can help the first time borrowers. It is not encouraged to obtain a departmental store cards on regular purchase. But it may still be helpful to establish credit for the first time. However, the card needs to be used in a proper manner. When all the above failed in establishing a credit history or conversion of no credit history, secured credit is the final resort. A credit card or loan can be availed with collateral security or guarantee attaching an asset to the account. A secured credit can be availed in an easier way than a non-secured loan. When the borrower fails to make payments, the asset attached to the loan or card will be liquidated to cover the payment. However, a good payment history with a secured loan or credit helps in establishing credit history or enhancing the credit score of the borrower. Above all, it has to be ensured by the borrower that the credit history is reported to credit bureaus to avail further loans or credit cards. Establishment of credit history or conversion of no credit history is just the first step and it takes a reasonable time to attain good credit history.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Credit Card Tips For Holiday Shopping 2016

By Herbert Moore, Posted: November 23, 2016

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading

Credit Cards to Save More on Holiday Shopping

By Herbert Moore, Posted: November 22, 2016

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door ... Continue reading

How to Get Free Wi-Fi in the Air

By Herbert Moore, Posted: September 28, 2016

Sometimes in-flight Wi-Fi is the bare necessity when you travel abroad or within the country. However not all airlines offer free in-flight Wi-Fi. There is only a couple of airlines that will allow you to use Wi-Fi ... Continue reading