A high credit score is helpful when it comes to securing loans, mortgages, insurances, building your business and renting apartments among other things. Without a credit card score, it may be hard to get a car, apartment or even a job. Loan lenders tend to look at your score to establish whether you are good at making early payments on your loans, bills and credits.
How can you create a credit history when you do not have a credit or score to begin with? Credit builder loans can help you establish a credit score. If you have a credit account that has been active for more than six months it will be easy for credit lenders to calculate your loans.
Here are simple ways on how you can establish a credit card
If you do not own a credit, apply for a secured credit card
It is always difficult for first time applicant to get their normal credit card applications approved. It is easier to get a secured credit card, but you will have to pay a security deposit upfront. The deposit you make is a similar amount to the loan limit. Secured credit cards are a great way to build your credit from zero. When you make the credit payments on time, you will receive positive points on your credit scores.
If you fail to make payments, your deposit is used as collateral. When you have enough points to qualify for a normal credit, you can close up your account and open an unsecured account that has better benefits.
You can get a co-signer with a better credit
You can apply for a credit card and get a credit with a c0-signer who has a good credit score. be sure both of your understand the repercussions of not making loan and credits on time on the points of your co-signer. The co-signer is responsible for all the late payments and impeding loans on your side.
Become a legal user of someone’s credit card
A friend, family member or partner can add you as a user of their own credit card. As a legal user, you are free to access the credit card whenever and you can be able to gain points and build a credit history from this credit. You should always have terms with the credit card owner on your use their credit to limit misuse of funds. If you have an agreement on repayment, ensure you put it down on paper to make it legal in case of a misunderstanding
Get a credit card on your rent
Some credit card services incorporate your monthly rental payments into your credit history. The more you pay the rent on time, the better your credit history and credit score becomes. Some credit score may not account for rental payments on your credit so it’s good to investigate before you take on this option.
Building a good credit score requires time, patience and maintenance. Ensure you pay all your bills and loans on time so you do no lower your credit points. Keep your utilization low, avoid opening too many credit accounts and check on your credit reports regularly to keep everything in check.