Pragmatic ways to build from no credit history

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most 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 » Pragmatic ways to build from no credit history

Pragmatic ways to build from no credit history

The content is accurate at the time of publication and is subject to change.
A credit history is extremely essential for every consumer. Credit card lenders, banks, insurance companies and even prospective employers take a look at the credit history of an individual before determining their creditworthiness. This is the reason why it is imperative that one must try and build on their credit history. Here are some pragmatic ways available for those with no credit history, to improve it and get to a state where they can prove their creditworthiness to lenders, especially credit card issuers and insurance companies. Apart from credit cards with high interests or security deposits, even student credit cards are available for those in college with no income of their own. Such cases might need you to have a co-signor on the credit card. Credit cards with security deposits There are many credit card issuers who offer the option of security deposit as an alternative to no credit history. No credit history means lack of credibility, thereby translating to a higher risk for the credit card issuer. Hence in those cases, the card holder is expected to pay a security deposit upfront and the credit limit available on the credit card would be equal to or a percentage of the security deposit. If the card holder doesn’t repay the dues on time, then the card issuer is free to claim the security deposit from the customer account. If the customer needs to use the card, then he or she will have to replenish the security deposit. However, a card holder can leave the security deposit as is and make regular bill payments, thereby improving their credit history significantly. Eventually, the card holder can even negotiate for a no security deposit, credit card, which is a logical progression, considering their improving credit score. Prepaid credit cards Some gas stations as well as retail chains sell prepaid credit cards and report it to the credit bureaus. Those with no credit history can certainly start with such cards and manage all their expenses through those prepaid cards. Over a period, their spending can be tracked and audited, and hence their credit score improves too. However, card holders must be careful while choosing prepaid credit cards. Some of them charge obnoxious penalties and processing fees thereby reducing the limit on the prepaid card to a great extent. Such prepaid cards don’t prove to be a useful commodity and could burn a hole in your pocket. Bad credit, credit cards Credit cards are offered by some lenders for those customers with a bad credit history. However, it goes without saying that such credit cards usually have numerous pitfalls. The card holder needs to be extremely careful as the interest rates on these credit cards are very high and so are the penalties. So the best way to use those cards is to make only necessary expenses and pay the bills on time. That way you will have a credit history to show for over a period of time, giving you a better chance to switch to a lower interest credit card in the longer run.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!