Having no credit history means you haven’t any record of debts in the past. Ideally, this is a very good thing but this could also be a pitfall for you if you’re planning of getting a loan, a mortgage or apply for a credit card. How could that be? It is because, lenders and credit card companies don’t have a basis yet of your creditworthiness. On the other hand, having a bad credit history could also be a disadvantage for lenders have an idea on how badly you have managed your finances in the past and even in the present. So having no credit is still far better than having a bad one.
The question now is, how can you have a credit history if lenders are not that willing to give you a chance? You just have to remind yourself that it will take time before you can fully establish your rating and be granted your first credit. If you come across some companies extending help to people who wanted to build their credit history in no time at all, better not listen for there is no other person who can build your history than yourself.
one of the most preferred ways in building a credit history is applying for a secured credit card. Secured credit card is acknowledged as the major and regular credit cards. They work the same way and can be used for purchases and hotel or ticket reservation. Since this is not a regular credit card, it is your responsibility to know everything about it; from the rates to the littlest details on the policies.
As its name implies, secured credit cards need a certain amount of deposit into your account for you to be able to use your card. The minimum deposit requirement varies from one bank to another. Some banks require $300 while others $500. This would not mean though that your credit limit is equal to your deposit. More often than not, it is just a percentage of your deposit. It follows then that the higher your deposit is, the higher your credit limit will be.
It is not easy building or repairing your credit score so once you for your first credit or has finally fixed your rating, do your best to make payments on time to avoid red marks on your credit report. Be wise in spending and you’ll never worry about your credit.
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