While you are just starting off with your financial career you might have heard the saying, “In order to get credit, you need to have credit”. This concept can be pretty much frustrating especially for a credit newbie or for someone who is starting off his financial career. Most of our life’s major milestones such as leasing a car, or buying a house, requires some bit of credit checks. But, in case your credit check is low, you might find yourself in a pool of hardships in order to get it approved. Remember most of the credit cards that are issued by the banks or any other credit institutions require a bit of mandatory credit history in order to get qualified. To be true there are only just some handful of cards that are made for those with no credit.
Well, there are a few stuffs that you must take care of while planning to build credit even if you are just starting off. Here in this article, we are going to discuss the same and let you know all that you need to do if you are having no credit history and want to build it asap.
Become An Authorized User: A very simple but efficient way of building credit is by becoming an authorized credit user on a friend’s or family member’s credit card. By being one, you can start piggy backing the account holders credit, thereby building your own credit history. Remember an authorized user gets the full benefit of the primary credit card owner, thereby making this method a quick way to build credit especially for a newbie.
But before you start off with becoming an authorized credit user, make sure that your friend or family member has a good credit score in their bag and uses a credit card responsibly. You do not want to start your financial career by becoming authorized on a credit card user having late payment history or debts. Remember these negatives can appear on your credit card and can even counteract with any sort of your future credit building plans. Apart from that try making sure that you practice responsibility from the first day of having a credit card. It is essential to make a clear plan of paying back all the purchases that you make with the help of credit.
Try Applying For A Secured Credit Card: Remember that secured credit cards are a perfect way to build credits especially if you are having none. Secured type of credit cards are much easier to get qualified in case you have no credit or your credit score is poor. You can always use a secured credit card just like a traditional one in order to establish good credit.
A secured card is very much identical to the regular ones out there. You even get a proper credit limit and can even incur interest charges while earning some reward points. However, the main difference is that you make a security deposit in order to receive a credit line. The minimum amount that you deposit with a secured credit card can typically start off at $200. So, if you are making a credit deposit of $200, then you receive a credit limit of $200.
Try Getting Credit For Paying Cell Phone Bills And Multi Utility Bills On Time: In case you don’t want to opt for a secured credit card to build credit, there are some other alternatives. Many banks or financial institutions do offer several types of credit-building tools while charging some amount as a monthly fee. Experian on the other hand provides their customers with an easy-to-use free tool called Experian Boost.
This service is an excellent way to get credit for paying several types of monthly utility bills such as cell phones, rents, streaming service bills, and a lot more to potentially boost your credit. Some of the qualifying streaming payments include Hulu, Disney+, HBO, Netflix, Starz etc.
With the help of Experian Boost, all you need to do is to connect your bank account to pay the bills. You then need to verify all the data and make a confirmation in order to add it to your Experian credit file. You can even receive an updated FICO score or a free copy of your credit report after successfully following all the steps.
What Does It Take To Build An Excellent Credit Score From No Credit
For someone who is starting early to build a good credit score, time is an important factor that might not work in your favor. Most of the loan lenders always want to see great behavior over time, which is much of what defines the overall FICO score. Here is a list of some of the major points that you must take care of
- Amounts owed (30% score)
- Length Of Credit History (15% score)
- Payment History (35% score)
- Credit Mix (10% score)
- New Credit (10% score)
All the proofs that ensure the lender that you make all your bill payments on time and that too without carrying large balances on your credits makes you more trustworthy and a less risky credit user especially for the lenders. All these behaviors listed above carry substantial weight especially when carried out properly over time.
Why Good Credit Must Be Maintained?
Having a healthy credit score is very much essential in order to obtain long-term financial security especially if you want to borrow for big mortgages like purchasing a house or a car. Building a healthy credit score from no credit takes time, but remember it isn’t impossible.
If you have any sort of future plans to credit boost with the help of your rents, you can always try Credit Rent Boost. At Credit Rent Boost, we work hand in hand with the landlords and the tenants and then report all the monthly payments to major credit bureaus such as TransUnion and Equifax. You can try logging in to our website in order to get an answer to all your queries about increasing your credit check with the help of rent.