Reasons why you do not have a score are:
They have never been listed on a prepaid account.
You have not used a loan for at least six months.
You recently applied for or added a loan.
What is the starting point for your score?
Just as new loans do not mean you start from scratch, it does not mean that you start at 300 in the basement. If you’ve never had credit, you’ve never made mistakes that lead to a devastating outcome.
If you do not have a credit history, the credit bureaus do not know enough about you to guess if you will repay borrowed money.
If you do not have a credit history, the credit bureaus do not know enough about you to guess if you will repay borrowed money. Moreover, that’s all that a credit score is – an estimate of the likelihood that you’ll pay back the next balance you’ve received, based on the data in your credit reports.
Once you start using credit, the results can be calculated. Your score does not start at the top, but not at the bottom of the scale.
How do I get a loan at all?
To introduce yourself to credit bureaus and develop a credit history, you should apply for a loan. Two products designed specifically for credit creation include:
1. Secured credit cards
These credit cards are, as the name implies, secured with cash. The deposit is usually the credit limit.
2. Loans for lenders
These are loans that are only released after payment has been received. They can be a good way to build a payment history and to accumulate a small emergency fund at the end of a repayment term.
If you have never had a balance but have a file, this is a red flag.
Request a free credit report from each three credit bureaus before each application. Every year you are entitled to an agency. If you’ve never had a balance but a file, this is a red mark: You may have misinterpreted someone else’s information or someone used your identity to get credit. Make mistakes to fix them.
Once you have been approved for your first lines of credit, follow these principles:
Always pay the bills on time. The payment history influences your results the most.
Use only a small part of your credit limit. Keep your balances at less than 30% of your limit and the lower the better.
Strive for a combination of different account types – eg. Eg installment loans with regular payments (eg car loan) and revolving debts (eg credit cards).
Follow these steps to fill your credit reports in no time. You’ve also created a credit score that allows you to get lower interest rates and access better credit products – such as an unsecured credit card or one,