Financial Advice Zone

Establishing A Credit History

When you don’t have a credit history it can be almost impossible to get a credit card or obtain a loan of any kind.  But not only that, credit has expanded it’s uses in the past few years.  Your employability may be partially determined on credit history now.  So what can you do if you can’t get a car or a job because of your lack of credit?  It’s almost a Catch-22, you can’t get credit because you don’t have credit, but how can you get credit if no one wants to give it to you?  How do legitimately  compare credit cards?  Here are a few tips.

Since lenders can’t base your eligibility for lending you money, they have to examine other factors when deciding what sort of credit risk you are.  Having a long-standing, consistently positive bank account history can go a long way.  You don’t have to have credit to open a checking account, so it won’t be reported to the credit bureau but your account history is still important.  This can show a lender that you are responsible with your funds.  Employment history works in the same way.  A potential lender wants to know if you can keep a job or if you have long periods of being unemployed.

Potential lenders can also look at your residence history.  They will want to know if you own or rent and if you have a habit of moving every few months.  It can definitely pay off to have a stable, long-term residence.  Even if you own a home jointly with a spouse, this can carry a lot of weight with financial lenders.  Going hand in hand with your residence, having a good history with your utilities is a great help.  Even with no credit history many utility companies will give you accounts in your name.  Having your name on these accounts won’t establish credit, but it can be very helpful in getting the lenders to help you establish that credit.

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