Monday, July 1, 2013

What To Do When You Have No Credit History At All

A baby eating a credit card. What could be more appropriate?
photo credit: _Dinkel_ via photopin cc

Read this if: 

1) You don't know how to build credit so that you can build more credit. 
2) Because if you don't have credit, you really can't get that much more credit. 

--

To get a credit card, you have to have good credit. To get approved for a loan, you'll need good credit. But what do you do if you've never had a line of credit? Having no credit means that potential lenders will have no idea what kind of person you will be financially - why would they lend you money? Here are some things you can do to establish credit. I based this off of what I found online and also on what things show up on my credit report, which is just my credit card (because I don't have loans).

Open A Student Credit Card

Credit cards that are specially designed for students are pretty easy to get. You'll have a pretty low credit limit, but that's good for some people, and if you're responsible with your first card, you'll start generating a good credit report, which will help you get more credit down the road. 

Open A Store Credit Card

I've noticed that every store seems to have a store credit card. These cards are also pretty easy to get, because the point is to encourage you to shop there. So if you do get one, make sure you're careful with paying on time because store cards extend to have the highest interest rates. 

Open A Secured Credit Card

These cards are also easier to get because the bank gets your deposit as collateral, which encourages good behavior on your part. 

Student Loans

Now, I'm not saying you should take out a loan just to establish credit, but if you do need student loans, know that you're at least getting the benefit of establishing credit. 

--

Plan of Action: 

1) Decide how you want to begin to establish credit in your name. Please be careful and pay on time and in full. I can't stress this enough. PAY ON TIME AND IN FULL!

--

Which way sounds safest to you? Let me know in the comments. 

As always, contact me with questions or suggestions! You can either comment directly on the post or send me an email to moneymattersjoan@gmail.com. 

No comments:

Post a Comment