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Research: Establish credit history with simple and effective tips and guidelines -

Having a bad credit history is one thing and having a no credit history is almost similar. This is always a catch-22 situation for most people. If you are new to the US, then you will have to first build your credit history. But to build your credit history you will have to start by obtaining a credit card. Lenders generally give credit cards only to those with a good credit history or someone with an established credit history. But if you don’t have a card and if no one gives you a card, then how will you be able to establish credit?

Whenever a person is denied credit, the creditor will have to give a written explanation as to why you were denied credit. You are entitled to a valid explanation as well as a free credit report for the denial.

An important thing that you must remember is that you should never apply for too many credit cards at the same time. Even if you have to make an enquiry with regard to your credit history, your credit report will contain that information.

Tips to establish credit history

Open a bank account – open a savings or a checking account. Ensure that you don’t overdraw or allow any checks to bounce.

Get utility bills – have something such a telephone connection, apartment, or gas connection in your name and ensure that you pay the bills on time.

Employment historywhen you don’t have credit history lenders will look at the employment history or residence history. Having a good job with a steady income will show that you are credit worthy to some extent. You will be in a better position if you don’t change jobs too frequently or if you have not had periods of unemployment. If you do have a history of changing jobs frequently, or if you have been unemployed on and off it can have a negative impact on your credit history.

Store cards – try and obtain a store card as these are easier to get. Ensure that you pay off the balances regularly. Store cards are generally not a great idea, but it does help in situations such as this. Before you apply for the store card ensure that they report to the credit bureau. Otherwise, getting a store card would be an absolute waste. Once you establish credit you could cancel these store cards. Most store cards can be used only in the issuing stores and carry high interest rates.

Secured cards – availing secured cards is the next best thing to do if you don’t have a credit history. If you obtain a secured card, you will be able to get a credit line that is almost equivalent to the amount of money that you have deposited with the bank. Hence, the banks are safe in case you default, as they have your deposit money with them.

Once you establish credit you must ensure that you keep up with the regular payments and avail your free credit report every year. Once you set the ball rolling things will fall in place.