Do any know how to start your credit when your credit history reads insufficient credit history?

Question

I have a credit history but I don't have anything that could give credit. I need to know so I can get a car loan without a co-signer. Are at least, start developing my own.

Answer 1

You can get a secured credit card. Check with local banks and credit unions. They may allow you to deposit money to secure your credit card. If you deposit $500, your credit limit will be $500. Just make sure to pay promptly each month. Keep balances under 25% of the limit. It will take several months for it to begin helping build your credit. If you need a car, you may also check with some of the buy here, pay here lots. Most require a weekly payment be made. Some report to the credit bureau. That would begin to build your credit. You will pay a premium to these car dealers, but it would be a way to start. Some of the larger car dealers have been advertising that they will finance a car with poor credit. From your post, you don't have bad credit, you just don't have any credit. One other thing to consider. Some small retailers have charge accounts. You make purchases and pay weekly or monthly until the debt is paid. Don't make purchases you don't really need. Something most people don't tell you is that a checking and savings account can help your credit, provided you don't have a lot of insufficient checks and you make regular deposits to a savings account. You are in a critical situation where you can build good or poor credit.Be careful and don't charge more than you can comfortably pay. Make sure to make your payments on time.

Answer 2

To start developing your credit you need to get some credit and use it properly. A good way to start is with American Express (that's how I did it, but that was 20 years ago) or with a department store charge. Then use the card and pay it off at the end of the month. In about 6 months to a year you should have some kind of credit history that you can use. Unfortunately, there is no quick way to do it. Credit requires that you show over a period of time that you can be responsible when someone lends you money. Having said that, I would get the card and then find a car dealer that works with bad credit or no credit. They are out there and very often you can show pay stubs for the last so many months to prove that you have a job. You might have a higher interest rate, but that is another way to build your credit. This is a great time of year for this, as many car dealers are trying to clear their lots of stock and show the best profit they can by year end - so they tend to be flexible is my experience. Peace!

Answer 3

Open an account with a local credit union. Put some money in savings. Take out a "share secured" loan using the savings as the collateral. Ask for the longest available loan length (usually 7 years) to keep the payments as low as possible. Make the payments on the loan...using either earned income or cash transfers from the savings account. The credit union should report this loan on your credit and you'll be able to build some credit history.

I've done this exact thing several times for myself and for my kids. Works great.

Answer 4

I work in mortgage and I've seen this situation resolved through the credit bureaus identifying and reporting alternative tradelines.

You can ask the 3 reporting agencies to add non-traditional forms of credit/tradelines. For example, car insurance, phone bills, even rent (sometimes). I believe that in order for these to count they have to have been open for at least one year and typically require a monthly payment of at least $100.00. The credit bureaus have to be able to contact and confirm information with the businesses. I have seen rent added as an alternative tradeline when you rent from a management company, not just a private landlord.

I'm not certain this will work for you or that you will be able to get what you need added in time. I've seen these get updated within 5 business days but that is by working through a mortgage company and usually paying a price for it. Just thought I'd throw the idea out there, good luck!

Answer 5

This is how I did it...I applied for a credit card. You have to have been working at the same job for at least six months to obtain a credit card. Pay all your bills on time. You can go to your local gas station and apply for a gas credit card. You can also get a department store credit card. Get one or two of each, just don't go crazy and get a wallet full of them or you'll end up in debt. Don't get all shopping happy either; control your spending. Good luck!

Answer 6

Go to the mall and buy some jewelry. Or you can get a secured credit card, where they put some money into savings for you, and give you a limit, of the amount they are holding, that way they are not risking anything, and you are building credit. We did ours that way, and have over 20,000 in credit card limits.

Answer 7

You need to open accounts that will report to the credit bureaus.

You also need to make sure you will get approved.


You should get a secured credit card or piggyback someone elses credit cards.


Yes piggybacking.


It works..



Here is a really really really intresting article about building credit, seasoning credit and piggybacking...


http://www.expert-credit-advice.com/building_credit.htm

Answer 8

You can get a department store credit card. Charge small items to it and pay it off each month. This will help you get started.

Answer 9

Gorilla Mike - but why would you want $20k in credit card debt - WOW!