Establishing credit?

Question

Is it true that having no credit history is the same as having a bad credit history? Will someone please provide me with a list or a website link that has information for establishing credit for the first time? The fact that I am in my early 40's may or may not make a difference but in case it does now you know. Thanks!

Answer 1

Sorry about the quick reply - I didn't have much time yesterday. No credit history is not as the same as a bad history, but it's not much better. You are just an unknown risk versus a known bad risk. I would suggest starting out with a department store card - they're easier to get with no credit than an unsecured credit card. The best advice I've received from "financial pros" is to 1) use the card and make payments to establish a payment history, and 2) never let your balance go above 50% of your credit limit. For example, if you have a credit limit of $1000, never charge more than $500. A balance of over 50% of your limit will reduce your credit score. Also, try not to have more than 2 or 3 open lines of credit at any time (any account that you can charge, pay off, then charge again, as opposed to a loan where you get the money then make "installment" payments). That will also lower your credit score.

The main thing you want to remember is, once you've established your credit, you need to maintain it. Too many people think of credit as extra money readily available. Rather, think of it like this, every time you use your credit, you're taking money away from yourself. That way you'll be less likely to run up a lot of debt that you can't afford to pay off.

Good luck!

Here are some web links to get you started.

Answer 2

If you have a savings account, Just use it as collateral for a loan for 24months and pay it off in 12 months. That's how I got establisted 40 years ago when I couldn't get a visa or mastercard.

Answer 3

There are credit cards for people who are looking to build their credit for the first time.