For many consumers, having no credit history can be just as bad as having bad credit. If you have no credit history you may be in limbo credit with potential creditors turning ask you credit because they have no way of knowing your level of credit risk.
Fortunately, if you find yourself stuck between a rock and a hard place “in relation to your credit, there are several things you can do to build a solid credit record. Many of these things are similar to what you could do if you had bad credit.
If you have lived in the same house for at least a year and employed for the same period of time, you may benefit from small lines of credit with department stores and other businesses in your local community. Make sure these companies to report your account information with the three national credit bureaus or you will be wasting your time to use their cards to build your credit.
The card interest rate to store many may be higher than a standard credit card, so be sure to keep only a small balance on any of these cards you may have. It is often a good idea to avoid paying your balance in full so you can build a history of repaying your credit report nascent. As long as you do not max your cards and make your minimum monthly payment required you’ll be fine.
Another way to build credit is to take a small loan from a local credit union or bank where you belong. If you can avoid it, do not use the proceeds of the loan, except for the debt. You will pay a little extra interest, but it is often a small price to pay for building your credit.
Once you have created a credit and creditors can see you have no problem paying off your debt you may start receiving business credit card offers. You might start getting all kinds of mail Discover, Visa, MasterCard and American Express even.
Be careful about the claims too many lines of credit. Most lenders will check your credit history when you apply for credit and each inquiry is noted on your credit report for at least six months. Too many applications are a red flag to lenders that you may be financially unstable. The best way would be to apply for a maximum credit line every six months.
If you are still not entitled to credit after the application with local businesses or you can not get a loan that you may not meet the minimum some creditors may serve salary requirements to evaluate your ability to repay your debts. If this happens, you may be approved for credit if you can find a friend or relative with good credit to co-sign for a line of credit in your name. This could be a risky proposition for the co-signer, however, as they will be stuck with the bill if you can not make your payments.
If you are a woman who is divorced or widowed and had all your credit accounts in the name of your husband, you may find yourself without any real call yourself credit. This can usually be easily corrected. The Equal Credit Opportunity Act makes it a law that creditors can not be required to list two names attached to a credit account if you have shared a name attached to your husband’s account.
If you need to build your credit the most important thing to remember is to be patient. Building credit takes time and you have to start somewhere. Why not start now?