How To Get Credit If You Have None
You have probably heard the saying “you need money to make money.†Well you need credit to get credit. Very frequently people are turned down for credit because they have a lack of a credit history.
Here are steps you can take to establish new credit.
1. Check your credit report. Sometimes you think you are being turned down for credit because have no record at the credit bureaus but you are wrong. Also it is amazing how many minors grow up to realize that something like an ad in newspaper placed in their name or a gym membership that was not paid for accidentally ended up in their credit report. Never assume that the problem is no credit, even if you are under twenty years old. This is because the theft of children’s ID for the purpose of establishing fake credit is on the rise and it is becoming more common for potential credit history o be stolen from those who have yet to develop a history.
2. Set Up a Checking and Savings Account. A checking and savings account is not something that will show up on your credit report. The reason you want to have one however is that lenders see them as a sign of financial responsibility and stability. It is also a good thing for a parent to open for a minor so that he or she can get some practice when it comes to using plastic.
3. Find a Joint Credit Co-Signer. One of the quickest ways to jump-start your credit history is to have your name added to someone else’s credit account. The history for that account is imported onto your credit report. Keep in mind this is only a good move if the person who is adding you has good credit. Another strategy is to get someone with good credit to cosign a loan with you.
4. Apply for Credit While You’re a College Student. The easiest time in life to get an unsecured credit card is while you are in school. This is when lenders are much more enthusiastic about extending credit. It is because they know that parents will foot the bill if the kids can’t.
5. Apply for Secured Card. If you can’t seem to be offered credit then you might want to consider getting a secured card. These cards require that you make a deposit with a bank (usually an amount between $$200 and $1000). Your credit limit is limited to that amount or sometimes that amount plus 50% of it. The best cards don’t charge application fees, have low annual fees and convert to a regular secured card after a year or so. This is a great way to improve your scores.
6. Take Out an Installment Loan. After you’ve used plastic successfully in the eyes of lenders you might be able to procure a personal loan. Adding an installment loan to your healthy credit mix such as an auto loan can really help boost a credit score.