If you don’t have a credit card, or have never commonly turned to credit for answers, then the chances are you like to live a frugal life. That opening point may sound bad, but it’s not a bad thing at all! People like to save money no matter how much they like to spend it at the same time. Frugality makes living a sustainable life lots easier and always allows you to dole out a little extra if need be. However, at the same time, this can work against you. If you don’t use credit you won’t have a credit history, and that’s the one thing anyone who works with money looks at to assure themselves you’re worthy of their time and money.
We hear a lot about people having bad credit, but rarely do we hear about people having no credit, despite it being a common problem. It’s an issue worthy of advice for the dos and don’ts of what you can do for yourself if you don’t have a credit history for a lender to fall back on.
Anyone starting out to build their credit history can use a few pointers to find where they can improve their score, and where to find those desperately needed sources of credit when it comes to getting a personal loan or something to cover your house. Aside from that, many other things in life rely on your credit score. Unfortunately some auto and home insurance companies use your credit score to determine rates. It may also come into play when wanting to rent a place to live or applying for a new job. So building a credit history is more than just being able to borrow money when you need to.
Check Your Score First of All
The first thing to do is to sign up to a free credit score check site and see what it currently stands at. Make yourself a credit account and then access a report at any time, it’s so easy to keep an eye on what makes you eligible. Most sites will even show you where you’re going wrong, so be sure to take tips from the professionals as well.
If you’re registered as someone paying bills on time and having no debt, that’s always going to work in your favor, and is a big part of having a good credit score. Yet, there are some cases where a low credit score, or one that doesn’t exist, isn’t exactly a problem. If you’re young and just finding your feet financially, your credit is going to be low, but it won’t be too low and is easily built upon by taking out a credit card, whether that be from a bank, store, or being authorized to use another person’s card.
Being a joint user on a credit card with a loved one is a good way to dip into the world of credit and it’s wily scores, so this might be the best way forward for you at first. When you have a little more confidence, apply for your own!
Sign Up for a Card
Signing up for a credit card doesn’t have to be hard, and whilst it’s an agreement between you and the lender, you can always choose how much you take on each month, and thus how much you’ll have to pay back.
You won’t have to pay back any credit you don’t use in a month, and that makes simply holding a card a whole lot easier. However, even when you have a credit card to make your credit score better, you’re still going to need to buy a few things with it each month to keep a good balance on it. The trick is to only use your credit card for items you need to buy anyway. Then track your spending and pay off the balance every month.
At Quick Notice: Find a Secured Loan Lender
When it comes to having no credit, or if you’re on the bad credit side, and you need money at a short notice whilst knowing you have the ability to pay it back, apply for secured loans. These give the lender a little more leeway in their lending habits as you’ll often have something, like a car or a house, on the line to make sure the money is paid back and on time.
If you need to help finance a mortgage, or to help cover the costs of your owned home, look out for secured homeowner loans , check with local lenders and online for the best deals as these can be a saving grace when no unsecured loan is open to you.
Let’s face it: at the end of the day, even bad credit is better than having no credit. Your credit history is always going to matter; so, get yourself a credit score by using traditional means, and use it for your big purchases, such as a phone bill. This way, there’s going to be a regular ebb and flow when it comes to your credit history, and that will keep your score on the other side of healthy.