The content is accurate at the time of publication and is subject to change.

Research: What you need to know if you are lacking in Credit History -

Having a history of credit has become an important part of everyday life nowadays, and lacking such credit history would give you plenty of disadvantages. This is because your credit history is often used as a credential to determine how good of a mortgage, job, promotion, and even insurance you could get. So what about those with no such credit history on their records?

Because of the importance people and institutions have placed on credit histories, having no such record would be equated to having bad credits. With no such credit history to explain your financial background and consumer habits, there is little institutions such as credit card issuers and even the company that you work for could do to determine how credit worthy you are. And due to that, they could label you as a financial risk because there is no telling whether or not you are as responsible as a credit user you might claim yourself to be.

For example, you would have difficulty in convincing your money lenders to lend you money because they don't trust clients with little or no records of faithful repayment in their company. The same thing goes for credit card issuers because the requirement to get a credit card account is a history of good credit, and because these issuers limit financial risk they only approve those with more than adequate credits. Even your life at work would be affected. Employers inquire about the credit history of someone they are considering of hiring or promoting, and they always choose the ones with good to excellent credit histories.

Thankfully, there are ways you could get around the problem of having no credit history. You are still a consumer and you would definitely have some traces of your purchases and payments somewhere. You could use that kind of information to show that you are indeed a responsible credit user if you really are. You need to understand that people and institutions need proof of your consumer behaviour to trust you in financial matters.

If you have information about your bank accounts, employment history, residence history, and records of your utilities then these are things to explain your consumer behaviour because they are as good as credit history information. Another good option is using retail store cards of the stores that you frequent, and they could show your track record of payments and purchases in their branches.

You could also seek out credit card issuers that are willing to take in clients with little or no credit history to establish credit by starting an account. There are plenty of credit card services offered by their issuers for people with no credit history if you know where to look and they include the Capital One cards, UPSide Visa cards, SilverCard Prepaid MasterCards, and many more. If you are a student in college then you would have a luckier chance of getting an account because some issuers recognize that even though students have little or no credit histories they still have a financial risk profile that is acceptable for issuing accounts.