No Credit? Use This Guide to Building Credit
You need credit for all sorts of things, like getting a personal loan, renting an apartment, and getting a lower price on your cell phone bill. But it's hard to get credit if you don't already have credit. Fortunately, building credit is easier than you think. Use this info to help you start building your credit so you'll have a solid credit history when you need it.
Become an Authorized User
Getting a credit card can be hard when you have no credit history. If you don't qualify for a credit card on your own, you can become an authorized user on another person's account, such as a parent or other trusted person. You have a chance to build credit, and they have a chance to earn points or rewards. The downside is that if you miss payments, the account holder is on the hook. And if they miss payments, it can affect both of your credit histories negatively. Make sure you're both financially responsible, and make payments on time.
Apply for a Secured Credit Card
Secured credit cards and student credit cards are easy for you to get (if you qualify), and will help you build credit when other companies won't give you a chance. Secured credit cards require money as collateral. You would need to put down $500 to obtain a secured credit card with a spending limit of $500. Just be sure the card you choose reports to the credit bureaus. Student credit cards are also designed for building credit. The downside is they have low spending limits and high interest rates, so you should avoid carrying a balance.
Get a Car Loan
Lenders checking your credit history like to see a variety of credit types or loans on your credit report. In addition to credit cards, student loans and auto loans can help build credit. Auto loans do have interest, which means you'll be paying more for the car than if you paid cash. The upside, however, is that it is a good way to build credit. If you don't have enough credit history to qualify for an auto loan, you may need a cosigner.
Avoid Charging Too Much
Once you get your credit card, don't go on a shopping spree. You need to use the card to show you can use credit responsibly, but you don't need to max it out or carry a lot of debt from month to month. Credit Karma recommends using no more than 30 percent of your available credit. If you can pay off the balance each month, you can avoid interest.
Make Payments on Time
Regardless of the type of account you have, it's important to make the payments on time every month. Building credit takes time, and lenders want to see that you can make on-time payments consistently. Late payments result in negative marks on your credit report and hurt your efforts to build a solid credit history.
Need money but don't have enough credit? You can always count on CreditBox to help you out! Even if other lenders have turned you away, we can still help you get a loan. Count on CreditBox to help you get the cash you need with loans up to $4,000. Apply now and use CreditBox to improve your credit score by making payments on time.
