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Research: Credit History and Credit Score For People with No Credit History -

People with no credit history may find it difficult to get a credit card, a loan or just general borrowing. Students, young people at most and immigrants are the common types of people who have no credit history. Since they don`t have credit history to begin with, it will be hard for them to do things more freely after graduating or getting settled.

Credit history is used as a basis in computing the credit score. It is based on credit components, each component equivalent to a weight. FICO scores, for instance put a 30% weight on the credit utilization. Credit scores are used in many future credit transactions, such as loans and credit. A good score, such as a FICO score of 650 and above, would increase the chances of getting approvals. Credit scores can also be used in obtaining employment and insurance policies, so basically, credit history is important. How to get a good score? Easy to explain but challenging to do. You only have to have a good credit history. By getting less credit, paying off the loans and buying only what you need. Sounds really easy, but seeing that the median FICO score of about 650, it can be really hard to get your credit history to end up a credit score of over 700. Even if you pay up your bills on time and get less credit, there are still factors that can lessen your credit score, like how long you had a debt and the fact that you have been in court due to a debt related case and sometimes due to errors.

Getting a credit card is something you really need to think about first. With that great responsibility, it is very important for new card holders to learn about credit management. Many had been victims of pitfalls caused by their credit cards and end up with nothing but red marks on their credit history. If it wasn`t their fault, meaning they paid their debts but their reports say they defaulted, their credit report would look ugly and they can be denied of credit or loans. If the errors are disputed, the errors will be corrected but not in a very long time. Now, credit history may look challenging and may just make people think that credit is not good and why not just avoid it to avoid getting a bad credit history? That is easy to say, but in times like this, when financing is hard to get or when borrowing from friends and family is almost impossible or not practicable anymore, who else can we turn to? Credit cards and loans. Don`t make it your final word that you won`t be getting a credit card or apply for a loan in the future. Sometimes, we really have to face that without cash, plastics can help.

Basically, a credit history can be founded upon through the borrower`s performance and actions. A good credit management skill is a good way to get a good credit history. That`s why people with no credit history have better chances of ending up with a good credit history than people with bad credit reports.