Understanding no credit history and its implication

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 » Understanding no credit history and its implication

Understanding no credit history and its implication

By
Add to Favorites:
Having no credit history is beneficial in many ways, and has many disadvantages too. Many people do not want to enter into the credit system of finances and maintain their healthy finance status. But having no credit, means there is no credit history to refer to, which makes it difficult to handle the financial emergencies. Credit cards are the most common way to build the credit history, and people without a credit history certainly do not have a credit card in their name, to avoid being in debt. There are both pros and cons of having no credit history. Some of them are listed below: Pros of having no credit history:
  • Having no credit history means having no credit cards or loans. Being in such a financial state is certainly better than being in debt.
  • People without the debt situation can manage the flow of the money in and out of their accounts since they know exactly what they spend on and how much more leverage they have. Without credit, it is impossible to cross that limit.
  • Since there is no credit history, there is no lure of credit cards and unnecessary purchases just to make use of the offer that the card gives. Also, a good savings plan can be put in place without any debt that should be paid off.
Cons of having no credit history:
  • Since credit history is the most referred document in financial world, having no credit history does not establish the credibility of the individual, which gives rise to a lot of problems.
  • Getting loans like auto loans and housing loans become almost impossible without a credible financial history. Credit scores will make the job much easier.
  • Even if there is no loan requirement, credit history plays an important role in all other daily activities. Apartments, utilities like cable, electricity and much more all come with a credit history check, to verify the credibility of the individual. Having no credit history makes it very difficult to get along with all these situations.
How to deal with No credit history: Having no credit history is not the end of financial life. There are many ways to get around the situation although difficult.
  • Credit history can be replaced with documents like recommendation letters from employers, universities, or previous land lords and even banks where the account is kept.
  • There are many ways to build credit history if the individual wants, and many ways to avoid it as well. Credit history can be successfully built by applying for personal loans with very high interest rates, secured credit cards, and the likes. High interest loans and secured loans do not need credit checks, but will report the activity to the credit check union.
  • Apartments and utilities can be obtained with valid income proof, recommendation letters from employers and so on. Many apartments that belong to individual owners can be rented without credit checks. Personal loans on the internet do not need credit checks but will have a specified low time frame for payback. Payday loan is one more option to explore which does not need credit checks.

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

Related Research:

5 Reasons to Get the Capital One Venture Miles Rewards Card

5 Reasons to Get the Capital One Venture Miles Rewards Card

By Herbert Moore, Posted: January 18, 2017

If you’re looking for a great travel rewards credit card—one that offers unlimited earning opportunities, flexible redemption, and lots of perks—look no further. This card from Capital One has you covered. Continue reading
Credit Card Tips For Holiday Shopping 2016

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

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