Individuals who do not have a credit history usually do not have a good credit rating. This means that they may not be eligible to finance big-ticket purchases such as homes or automobiles. There are ways for these individuals to get a better credit rating, enabling them to begin purchasing items using credit.
One thing that many people overlook is having a savings and checking account. Bank accounts help to establish a financial history and lenders view these accounts as signs of stability. Children cannot open accounts in their own name until age 18 but they can open a joint account at any age with an adult.
The consumer should have at least three open lines of credit that are listed on the credit report. A fast way to do that is to obtain prepaid credit cards. Some banks offer prepaid Visas and MasterCards with 100 percent guaranteed approval. Some cards have no activation fee and include services like free bill pay as well as special interest rate offers.
Even though the consumer may believe he or she does not have any credit, a free credit report should be obtained from each of the three credit bureaus. If there are any errors or missing information, it should be disputed. Review of this report will also allow the individual to verify that no one else’s information is listed, whether due to error or identity theft.
Borrowing credit from others is another way to quickly establish credit. The consumer can be added as a joint account holder on a credit card. Individuals who are applying for a loan can ask someone to serve as the co-signer. This may allow them to qualify for a loan they may not otherwise receive. The loan will appear on the credit report and will improve the credit score once it is paid off according to terms.