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.

How to rebuild your credit score after credit disaster

You need to add positive stuff to your credit profile for improving your score. The first step is to get some credit or charge cards if you don’t have any. If you still have some old accounts to use, that’s the best.

Apply for a bank secured credit card

Secure card gives you credit limit that is usually equal to the deposits in the banks savings account. It’s better to get secured card from bank so that account information will be relayed to three credit bureaus. Mostly there will be a annual member fee and it should be around $30. After a year you will be eligible to covert to card into a regular credit card.

Get GAS and department store card

It’s comparatively easy to get a GAS or department store card. You should try to get one of these cards after using the secure credit card for a few months. Don’t try too hard as it might hurt your score if you apply too many cards within a short time period

Avail an installment loan

If it’s possible try to get a small personal loan from bank or credit union. Usually it’s little easier to get the approval for loan though credit unions. If you can’t get approval on your own, you can try to get a co-signer to get the loan.

Remember to use your credit well. Avoid any mistakes which have negative impact to your score.