No Credit History Hurts A Little
June 8, 2009 – 1:42 amNot having any credit history can often be a bigger burden than having poor credit history. You have no reputation, and nothing to show, so credit companies will often deny you. There are ways to improve your credit without paying sky high interest rates, and sometimes without getting a credit card at all. The following methods will improve your credit score and open opportunities for better financial opportunities.
First of all, secured credit cards do not require any history. In fact, anyone that is over 18 can get a secured credit card through their bank. You simply need a minimum balance, such as $300. You then get an assigned interest rate and a spending limit. After that you can make small purchases with your savings account and pay it back before any interest occurs.
Student loans are also a great way to improve your credit. These loans are different from larger loans, and are generally easy to pay off with low or no interest rates. In addition, you also have much more time to pay student loans than you do for say, a credit card or mortgage loan. Student loans are fantastic for those entering a university and trying to establish a good credit score.
Purchasing a car and getting an auto loan is also a step towards improving your credit. Auto loans are relatively easy to apply for and you can usually get a cheap auto loan, even with no credit history.
In any event, combining too many credit boosting methods can be hazardous. Taking on several credit cards, and loans, will eventually lead to an inability to repay them on time. Of course, this will increase interest rates and in return lower your credit score. This should be avoided at all costs, unless you already have the money to cover it.
Tags: financing, secured card, young