How to build credit score if you don’t have credit

All we know that you need credit to get credit. Atleast once you experienced in your life that you applied for credit and it’s turned down due to lack of credit history.

So you need to establish your credit profile to avail any credit when needed. You can do so quickly if you follow the following steps carefully.

1. Check your credit profile. We often think that we might not any profile with the bureaus as we have not taken any credit. But it’s better to check credit report and you might have one. Who knows you might be a victim of identity theft. So it’s a wise idea to check your report to confirm that there is nothing negative on that.

2.Open bank checking and savings account. Usually they don’t appear on your credit report. But creditor sees as a positive sign and it reflects your awareness and financial stability. You can start these steps also as a minor.

3. You can start using an add-on card of someone else. Specially your parents can add you as an user and that gives you some idea about credit card usages.This will not improve your score, but good for understanding.

4. Another strategy to get someone with good credit as a co-signer when you apply for a loan.

5. Apply for credit card when you are in school. It’s considered relatively easier to get unsecured credit card with no score when you are in school. But be sensitive when it comes to spending. Also look for cards with low annual fee and try not to commit any mistake.

6.Try to get an alternate credit card. If you are not eligible for regular credit card, try to get a store or gas charge card. Those are relatively easy to get.

Alternate and safe option to start with bank secured credit card. These cards require you to deposit certain amount in bank’s savings account and you get same amount of credit limit.

7. Avail a installment loan. After using credit cards for a few months, the best option is to get a small loan. You may buy a used car and take a loan of $2000. This demonstrates that you are good in handling different types of loan.