Establishing a good credit history

Building a credit score from the start is hard especially when you do not have any credit history. Without any financial history, it’s going to be hard t get a loan or an apartment. High credit scores come in handy when you are trying to build a business, get a job, take insurance, secure a loan, get a mortgage and purchase a vehicle. Lenders take your credit into account to predict if you are going to complete the repayments on time. The problem is, how can you get your first credit card when you need a bit of financial history to get one in the first place?

Here is how you can do it

Apply for a secured credit cards loan

For people who are trying to build their credit cards from scratch, it is way easier to do it when you have a secured credit card. It can be difficult to get a normal credit card approved, which is why you should for the secured loan as your first option. With the secured credit loan, you will have to make a security deposit upfront. The payments amount is exactly the same as the loan limit for your credit card.

This is the best way to build your credit from scratch. Once the payments are made on the credit cards, you will start receiving the credit card scores.  If you do not make the payments on time, the deposit will be used as collateral. When you have gained enough points to qualify for any other credit card, you can now get rid of the secured credit account and get an unsecured one.

Get a co-signer

There are plenty of people with good credit scores. If you happen to know someone really close with a great score, you can ask to co-sign their credit cards. It is really a simple process that will boost your credit card scores. This method is kind of tricky in its own way; if you do not make loan and credit payments on time you are not the one to suffer. This can seriously damage the credibility and credit history of the co-signer.

Get credit for your rentals

You want to take advantage of every chance you get. Some services will give you an option of adding the rental payments to your credit cards. This means that every time you make the rental payments, you get to build up points and a credit history.  This is a great way to get something positive going. Keep in mind that not all lenders will accept the rental payment plans on your credit cards. Make sure they have this policy before signing up for a credit card.

Become an authorised user on someone’s credit cards

Close family, business partners and friends can legally ass you to their credit cards as a co-user. You are legally allowed to access their credit cards for the purpose of usage and building some points on your own credit. As long as you create conditions and terms for the shared credits you will not have issues like late payments and misuse of funds.