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I receive many daily questions regarding no credit finance. People feel intrigued by it, by how someone with no credit information instantly becomes a high risk lending case. No credit at all is usually better than having bad credit, but still both cases go hand in hand when it comes to obtaining finance: they have an extremely hard time obtaining it. What ways are there to establish a few records on one’s credit history? Plenty. But to have access to those financial products which will provide you with your much desired credit history, you must have one to begin with. Crazy, is it not?
In this article we will deal with the basics on how to establish the first records on your credit history. Whether you have just come of age and are looking for a student loan to finance your career or if you have just graduated without a single debt and want to take out a loan to buy a vehicle, this is the guide for you.
Step #1: A Job
Finding a job might not be your number one priority, but if you have in mind the idea of finding finance sooner or later, you will need to get a job. Chances are no lender will be willing to fund you if you are not working at a stable job, as you will have no means of repaying such loan.
Having a stable job will not do anything credit history wise, but it certainly is the first step on the ladder.
Step #2: A Bank Account
This second step will not help you to create credit records either, but having a bank account is essential if you are planning on seeking finance in the short run. Loan applicants are often required to have a bank account.
Every single money movement you make will be recorded on the account history, whether it is a deposit, a withdrawal, etc, it will be there. This information might come in handy as you will be able to show the lender proof of your responsible money management.
Step #3: Here Comes The Credit Card
Now that you have successfully opened up a bank account and have managed it for a few months and shown the bank you are a responsible person, you are ready to apply for a credit card. Obtaining a credit card and using it wisely will help you to start establishing a credit record. Bank credit cards are not that easy to obtain, so you might want to apply first for a department store card or a gas card which carry very few requirements.
Another thing you can do is meet with a representative from your bank and explain your situation to him, tell him you want to obtain your first credit card and that you want help in finding the right one for you.
Once the card is in your power, it is very important for you to make intelligent purchases. Buy only what you can afford, and make each monthly payment on time. The idea is to establish a good credit history, not to get caught up in debt and start out with the wrong foot.
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