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Having no credit history could be tough and trying while applying for credit cards/loans. You need to have a good credit history to persuade the lender into agreeing to part with his money. How could you establish credit when nobody is inclined to lend you? Lenders can be very thorough and might wish to look into your past credit record to support your claim for a first time loan. So it becomes significantly necessary to establish a good credit record.
How to establish good credit? You must understand what your lenders are looking for. Taking certain measures could help achieve your goal of establishing credit.
You can start off by opening a bank account. To open a bank account you do not require a past credit record. You just need to furnish proof of identity, residence and an account holder who can vouch for you. Though your bank account is not recorded with any credit bureaus, it may play a very important role when a lender deliberates to sanction a loan.
Operating a bank account to your credit shows that you can handle your money well and will also make a great impression on your lender. Though bank accounts do not establish your credit record, lenders will always use this information to decide whether you could be trusted.
Maintain a good business relationship with the bank will perk up the possibilities of you getting a loan/credit card through them. Your bank is the place where the lender will verify your credentials first. So the good relations you have developed with your bank will stand in good stead while applying for a loan.
Your employment history is an aspect your lender could look into. They would check the frequencies of your job changes, or number of times you have remained unemployed, etc. A stable job can increase your chances of getting your loan/credit card, etc., approved.
Lenders will also verify how frequently you change your residence, whether you own a house or rent. It will be immensely helpful to own a home singularly or jointly. Owning a home goes a long way in helping you to get credit.
Your credibility can be strengthened by having many utilities in your name. You do not need a credit history to get cable, telephone, gas or electric service. Having these services in your name can be of great help when applying for credit without a credit history.
Like bad credit history, no credit history can also be great a deterrent in all your business transactions. So it becomes immensely important to establish good credit history.
Creating a good credit history may take a lot of time. It is not possible to achieve a high credit score in a short period. Factors like your money transactions, length of the credit period, etc., contribute to make up your score. So it is not only essential to establish credit initially, but also it is important that you improve it by doing the proper things to sustain a good credit.
