The need for establishing 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 » The need for establishing credit history?

The need for establishing credit history?

The content is accurate at the time of publication and is subject to change.
Having no credit history is the biggest problem in acquiring a new credit card or any type of loan. Even though you don`t have any credit history and not many companies are interested in offering credit, credit history can be established. In converting a zero credit history to an established credit history, lending institutions examine several factors to determine the capacity of the lender. Following factors are examined by lenders for establishing the credit history for providing the loan or credit card for the first time. Transactions of bank account: Credit history or non-credit score is not required to open a bank account. Transactions with the bank pay a vital role in determining the capacity of the borrower by credit bureaus. Maintaining the bank account in a proper standard proves that the borrower can manage money in proper way. Employment history: The major factor influences the credit score is the details of present and past employment. The lenders look into the factors that how long the proposed borrower hold a job, employment status, unemployment period if any, etc. A steady job with good records increase the chances of availing the good credit score. Apart from bank account, establishment of relationship with the bank will increase the chance of obtaining credit card or loan. The existing good relationships with bankers enhance the credit score. History of residence: Residing locality, rented or own premises, frequency of shifting the residence, etc are examined. Additional scoring will be added for the residence offered by stable employment or event for a joint possession of property along with the spouse. Utilities in the name of borrower: Many utilities can be registered in the name of borrower even with zero or no credit history. The utility may include electricity connection, gas connection, telephone, cable, water service, etc.; having a registration with these accounts can help the first time borrowers. It is not encouraged to obtain a departmental store cards on regular purchase. But it may still be helpful to establish credit for the first time. However, the card needs to be used in a proper manner. When all the above failed in establishing a credit history or conversion of no credit history, secured credit is the final resort. A credit card or loan can be availed with collateral security or guarantee attaching an asset to the account. A secured credit can be availed in an easier way than a non-secured loan. When the borrower fails to make payments, the asset attached to the loan or card will be liquidated to cover the payment. However, a good payment history with a secured loan or credit helps in establishing credit history or enhancing the credit score of the borrower. Above all, it has to be ensured by the borrower that the credit history is reported to credit bureaus to avail further loans or credit cards. Establishment of credit history or conversion of no credit history is just the first step and it takes a reasonable time to attain good credit history.

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!