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.

The Case for College Credit Cards

There’s been a lot of scrutiny and criticism aimed at college-aged kids and credit card offers. Many college students are already accumulating debt through student loans, and some of the marketing arrangements between banks and college campuses feel downright slimy. But should you panic when your child brings home their first credit card? Here are a few reasons why college kids with credit cards might not be such a bad thing after all. In fact, you might want to encourage your child to get a couple of credit cards while they still can.

The cards are easy to get. In fact, experts agree that the college years are the time when credit is most easily available. Banks offer credit to students with the hope that these young people will become high-earning professionals who don’t pose much of a credit risk. Extending a line of credit to young adults with bright futures is practically money in the bank.

The limits are low. No college student will be offered many thousands of dollars in credit, especially if they don’t have a steady source of income. Many student credit card limits are $500 – $1,000. While that’s nothing to sneeze at, it’s unlikely that such an amount will cause financial ruin for the student.

It’s never too early to start building a credit history. The length of one’s credit history is an important part of their credit score. The longer an account has existed, the better. If your child gets a credit card in college, they’ll already have an established history by the time they graduate and look into purchasing a car or home.

Help is available. Have you talked to your kids about debt? Maybe you’ve tried to be a good role-model; or, perhaps you’re an example of what not to do with credit cards. Either way, your kids have been paying attention. Plus, many campuses are now offering – or requiring – financial management courses for college students. This is long overdue, and there are high hopes that such classes will lessen the temptation to abuse the plastic.

If your child is nearing college age, have a frank discussion with them about debt. Explain the difference between good debt (debt that brings a return on investment) and bad debt (going into debt for consumables or rapidly-depreciating items). Most of all, teach them the importance of living within their means and not viewing credit cards as ‘free money’.