At 50 Years Old - How Can One Establish Credit?

Question

I found out that by paying cash for most items over the past 10 years, that I have ruined my credit rating. It's not that I have bad credit, but I have NO credit. As I went to puchase a car this evening, I was stunned to hear that I am a banking risk. How does one begin a credit history at 50 years old? I've checked on line for some secured and unsecured credit card deals. I suppose that's a starting point. Any thoughts?

Answer 1

There are two ways I always advise my clients and it works every time. First try to get about 5 credit cards. It doesn't matter the interest rate or anything alone that line. Only use one. What this will do is cause your score to go up. You now have five different companies reporting to your credit every month. The next item is to use only one of the credit cards and purchase your groceries or something that cost about $100 a month. Pay off the credit card within the 30 day grace period and you won't pay interest. This shows you can carry a balance and pay it off. I have found this to be the best way to raise a credit score quickly.

Answer 2

The same way you would if you were 20. Just start small and work your way up to something larger and always pay it off on time or early. If you're going to make a major purchase and you have the cash get it on credit and pay it out. You just have to establish credit as you can.