Having NO credit is just as bad as having BAD credit?

Question

I currently have no credit and can never get approved for anything. There are somethings I would like to do, but first i need to build up my credit but i can never get a chance b/c im always denied. What can i do or use to establish my own credit.

Answer 1

If you have a checking or a savings account, I would try where you do you banking first. Sometimes they offer secured cards or even unsecured cards with a small limit. Orchard Bank(HSBC) offers a secured card as well as New Millenium bank. Once you're able to get onr of those cards, I'd spend no more than $30 and pay that off every month. Credit cards should be used only in emergrencies. You might also think about socking away some extra cash in a prepaid Visa or Mastercard as well.


Another thing is that you can report your monthly payments on practically everything that you pay every month. There's a website (click this link) http://www.prbc.com/consumers that you can enroll in a program, that verifies, reports historical payments, and also has a bill-pay service that reports the current and future payments. The beauty of this is that this shows what the traditional credit reports do not: an accurate payment history. You can have things like rent, utilities, day care, storage, insurance, phone, cell phone, anything that you pay a month that you receive a statement for. The information reported is compiled in what's call a Bill Payment Score, or BPS. Under the FCRA (Fair Credit Reporting Act) you can have this taken into consideration when lenders are reviewing your credit to give an accurate picture of what your credit is really like.

Answer 2

Getting your credit established is a long process. But here are some simple things you can do to get started:

1. Open a checking or savings account. While a bank account will not directly affect your credit score, the account activity will demonstrate your ability to handle money responsibly.

2. Apply for a credit card. ** I wouldn't suggest applying for a store credit card (above) **. Instead, choose a credit card designed for poor / no credit. Although you'll pay higher interest rates and additional fees (when compared to "standard" credit cards), you'll prove your credit worthiness-- and eventually you'll get a better rate and lower fees.

Are you a student? There are also many credit cards designed for students with little or no income.

3. Apply for a small loan or line of credit from your local bank. Repay the loan promptly and on time to build a positive credit history and earn a good credit rating.

* If you don't qualify for credit on the basis of your own credit file, consider asking someone with an established credit history (like a parent) to co-sign your application.

Hope this helps! GOOD LUCK!

Answer 3

Yes, it really is in most instances just as bad, because in order to buy big things like cars & homes, you need to prove you have the ability to pay them back in order to get loans, so here's what you do ... (this is what I helped someone else w/ who had bad credit & couldn't get new credit cards to establish good credit) ... get a relative or mate (if you're married) who has good credit to add you on their credit cards as an "authorized user." They don't even have to give you a card or the actual ability to use the account. All they have to do is do what they do ... use their credit & pay it on time, and because you are a name on the account, this counts towards your credit as well! The person I helped ... their credit shot up from 400's to over 700 in about three years! (We only checked his credit recently after three years, so it may have taken even less time, so if you have a reliable source to check your credit every 12 mos or so, you can do that). Once you start seeing your credit go up, you may want to get maybe small credit cards, like gas station cards which you could use every time you pump gas & pay back say the same week ... just so that the credit companies see you use it & pay on time, establishing credit. Of course, with time, you'll be able to get more & more cards. This has been super effective from what I have seen, not just w/ the person I helped, but others I know who have done it.

Answer 4

Credit is the ability to go into debt. Credit itself, is good. Using credit is bad.

You can establish credit by paying your bills. I pay my utility bills every month. I pay medical and dental bills. I have a history of paying my obligations.

Bad credit is what you get when you default. You need to pay your bills. But, pay as you go. Do not pay interest for anything, other than real estate investments.

The idea of establishing credit so that you can get a credit card, an pay outrageous interest, isn't very smart. Rather, you should establish credit by paying your monthly utility bills, and whatever services that you receive. Save your money in the bank. Purchase with what cash you have.

Eventually, if you decide to invest in a house, or other real estate, you will have established credit, and you will have money in the bank for a down payment, plus a cushion for unexpected expenses.

Answer 5

Yes they are pretty much just as bad.

One thing you can do is sign up for a store credit card - JC Penny, etc. (only one, start small) and keep a balance that is lower than 25% of the available credit - but DO NOT pay it off every month, you have to leave a little and show that you can manage debt. If you keep paying it off, they realise you are merely treating it as a cash card.

Banks also offer secured credit cards where you have it tied to an account that automatically covers the payment in the case of you being late or unable to pay - but there is often a yearly fee, heck out Bank of America or a similar institution nearby.

Answer 6

your best bets are store credit cards and/or a secured credit cad from your bank/credit union. having a secured card means that you have to keep the maximum amount allowed on your card in a savings account (often interest bearing). this would be a visa or mastercard likely with a $500 or $1000 limit. after using the card and having good payment history (about 6-12 months) you can talk to your bank about converting it to a regular card. the advantage here is that as a major credit card you can use it anywhere. when it is converted to a regular card you can use it as overdraft protection (in addition to your savings account) for your checking account. store cards are fine for building credit but in my experience do very little for your credit once you have an established credit history. having your money earn interest doesn't hurt either.

i also recommend that you talk to your financial advisor. many banks offer this service for free and it gives you a chance to talk to a professional so that you can really understand what services your bank offers and which of those services fit your needs.

if you are trying to buy a large item (for instance a car) maybe you can have a parent co-sign. also having things like rent, payments for utilities, cell phone and gym memberships help build your credit, especially if you do automatic payments. good luck.

Answer 7

No! No credit is never as bad as "BAD credit! You just need to start some where to prove your credit worthiness!
You can start with a "car" loan which in most cases and states are very easy to get today!
Another suggestion is a credit card to be used with responsibility! Meaning: Use it within your means and do not abuse it as most find themselves doing these days!
From those perspectives, you will build a "creditworthiness" along with paying all your bills on time allowing for "more" credit as time passes!

Answer 8

Actually... have no credit is worse than having bad credit.

I know how you feel. I don't have much credit and can't get approved for sh!t. Basically what you need to do is use your credit card for small purchases... such as gas or whatever and then pay if off as soon as you get the bill. That looks good for your credit and will help build it faster.

Answer 9

I can only answer from my own personal experience. At the ripe old age of 45 I hadn't borrowed ANY money in about 10 years after paying debt for over 15 years. NEVER a late payment, perfect credit score. Unfortunately, I found that NOT incurring debt was as bad as filing bankruptcy, i.e., after a period of time your record is wiped out. Credit is a game with the "interest" coming out of your pocket for the benefit of the lender. My suggestion to all is to live within your means and not have high expectations. For the majority of us a home is truly out of our reach. The upkeep is more than you can imagine, whether it be a car, home, or whatever. The initial purchase is only the beginning. LIVE SIMPLY to simply live.

Answer 10

Well, stop applying for more and more credit cards because each time you apply an "inquiry" shows up on your credit report. Too many inquiries is also a turn off.

CapitalOne almost always approves a person without credit for their Limited Credit Platinum Card. You will probably start with a $300 line of credit but after a few months it can be increased.

Click below to apply:
http://capitalone.com/creditcards/products/9862/27/index.php?linkid=WWW_Z_Z_02_CCOMP_C1_03_G_C256