How to Build Credit When You Have None
Having bad credit and having no credit are similar in many ways. If you do not have a financial background to prove how responsible (or irresponsible) you are with money, lenders have no way to determine whether it is a good idea to give you money or not. This can make it hard for you in many ways including finding a place to live or a car to drive. If your credit history is null and you have been getting rejected left and right, try these methods to boost your credit score.
Talk to Your Landlord
Renters without credit history may have opportunity to build credit by proving they are good tenants. Ask your landlord if he would consider reporting your payment history to service providers that report rent. Your payment history would be posted to major credit bureaus, which can get your credit building off to a start.
Credit Starter Loans
Look into credit starter or credit builder loans. These are ideal for people with no credit, as opposed to traditional loans. There are companies that offer small installment loans that can boost your credit.
Unlike traditional loans where money is received right away, you have to make payments to get the cash. You make timely payments on the loan until it is paid in full, which are held in an account and distributed to you after you pay the loan off.
Store Credit Cards
Store cards are easier to receive and are more affordable than secured credit cards. These offer you a chance to build your credit score. The catch is they can only be used in the store you are applying at and you must go to the store to apply.
Maintaining Your Score
Getting your score to an ideal range, over 700, takes work but your work is not complete there. You must maintain your score to keep it at a "good" number. To do this, you need to pay your bills on time, keep your utilization rates low (meaning keeping your balances low) and your debt‐to‐income ratio low. The number of credit accounts you have can also negatively impact your score, so do not get tempted to open too many accounts.
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