You’ll be surprise but there are many adults who still have no or little credit history to work with. Without credit, you won’t be able to obtain the necessary track record to obtain financing for major purchases down the line – mortgages, car loans, educational loans, vacations, and for some, a generous line of credit for new business ventures.
The group that is most afflicted with the “no credit history” dilemma is generally college students and newly arrived immigrants from other countries. For others, they should be more focused on maintaining or rebuilding their credit. The strategy outlined here is therefore, for people with no credit history.
Step One: Get a Secured Credit Card. There are several major banks that offer a terrific secured credit card to get you going. HSBC and Bank of America are two great places to start. After 12 – 18 months of solid, on time payments, they will almost certainly convert your secured credit card to an unsecured credit card. This will then open up the doors for other creditors to extend you credit. Expect to see some "pre-approval" card applications in the mailbox.
Step Two: Get a Secured Loan. Similar to a secured credit card, a secured loan requires a deposit (typically a $500 minimum) where they then will float you back the same amount in the form of a secured loan. All you really paying for is interest (at a $500 deposit, it shouldn’t be a lot). Its well worth it at the end since this is used to build up a credit history.
Step Three: Become an Authorized User. If you know some one close to you who has terrific credit and is willing to add you as an Authorized User, then request to do so. Basically, you’re “borrowing” their credit history to build up yours.
Any three of these time-tested strategies will work – either by themselves or altogether. Within a year and half, you’ll have a very good credit history to work with. One important note though, you should have a good job as well. A stable job will ensure that you could pay off your credit balances while improving your chances of getting better credit cards in the future.
About the Author:
Kit Phillip is a Researcher and Contributor to two of the Internet’s popular financial news web sites: CreditCardCreditNews.com and MoneyPersonalFinance.com. For
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