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Research: The Disadvantages of Having No Credit History -

There is the problem with having no or lacking in a credit history, it is almost always treated the same way as having a history of bad credit. Having a credit history or record has become an integral part of everyday living and consumer lifestyles, as it is often used to determine how of services you could get. This article would give you a good idea on what kind of disadvantages you could encounter if you have little or no credit history.

Your credit history is often used to check on your background and consumer habits, so if you lack such a record then you would a harder time working your way in today's society. Companies nowadays check on these records to determine which employee or applicants they would promote or hire. And these institutions would hesitate if they find that an employee or applicant lacks such a record, and they would equate that situation with having bad credit. This means they might not promote or hire you if you lack the necessary credit history to determine your creditworthiness, unless you could convince them to do so with other similar records or documents.

Another disadvantage you could get is that you might not be able to borrow money or credits from your associates. Your money lenders and credit card issuers prefer to cater clients with the more likely chance of paying them back with interest, of which they check with their credit history to see if they are indeed creditworthy to be trusted with such financial matters. This is because they are for-profit business that requires them to lend out money and get them back from their clients with interest. If you lack a credit history, then they would consider you as a financial risk because there is no telling if you could pay them back with interest or not.

You would even have a hard time in starting a credit account to build up a credit history if you don't have prior records, because the Cacth-22 situation here is that you need a credit history to start one. Credit card issuers, like the previous mentioned institutions mentioned earlier, usually check on the clients' credit card history to see if they are credit worthy to start an account. So essentially, you would not be able to start your account unless you have certain records to prove that you are indeed creditworthy and responsible enough to handle your credits and finances.

It is important that you have a credit history if you are around high school or university age, as that is the most ideal time to start having one. Be sure that you have enough records to show that you are a creditworthy consumer, as that is usually what is being searched for. Also, once you get a credit history, be sure that you handle your finances carefully and responsibly, otherwise you would get into a financial pitfall and end up in a situation not unlike your scenario of not having a credit history.