6 Simple Ways to Establish Credit without a Credit History
For anyone who has never had a credit card, bought a house, leased a car, or taken out a bank loan, credit may be hard to get. It’s something that has to be built, not something automatically generated.
Unfortunately, with the lack of credit often comes the lack of a credit score. This can be detrimental: if you have no credit score, you may have a hard time being approved for anything.
However, there are ways to get a credit score without having credit. To begin, start by taking the following actions:
Pull Up Your Credit Report: Even if you are certain you have no credit and no credit score, it’s still worth double checking. You might be surprised to find that you actually do have a credit report filed with a credit bureau. Pulling up your credit is a great way to check for things like errors and identity theft.
Take it to the Bank: The second step in establishing credit is to open a checking account and savings account at your local bank. Sometimes your accounts may show up on your credit report, but typically they don’t. Still, having accounts at the bank can attest to your financial know how and work in your favor. Bank accounts can also help you to learn how to manage money and prepare yourself for the world of credit cards.
Start in College: Applying for credit in college can be a bit of a double edge sword. In college, it’s easy to get credit, but it can also be dangerous: from zero to ten seconds you can go from no debt to overwhelming debt. Still, starting your credit in college, and using it responsibility, can be a great way to establish a solid credit score.
Get Authorized as a Joint User: If you are unable to get your own credit card, a great way to start establishing credit is to get authorized as a joint user on someone else’s account. But, be sure the person you are joining is responsible: if they have bad credit, they can take you down with them.
Get a Card From a Department Store: A department store card is another good way to build up credit. They can build up your credit score as quickly as a major credit card, but their application process is usually more liberal. A gas card, in lieu of or in addition to a department store card, is also a good route to take.
Look at Alternatives: Other alternatives to help yourself establish credit include doing things like paying rent, paying utilities, and rent to own programs. These can help you establish yourself and make lenders more confident in extending credit to you.
When it comes down to it, establishing credit isn’t difficult, and it doesn’t take very long. A few simple steps can help you to start building credit and get on the road to financial stability.