Building Credit With No Credit

credit application denied

Have you or anyone you know been in the situation where you could not get approved for a credit line? If this sounds familiar, you should continue reading!

Why You Are Being Denied:

Most of the time, when you are denied for credit it usually means that youre credit score is too low or you do not have enough credit history for the bank to see your credit score and to pull your credit report to analyze if you are a trustworthy borrower or not. When talking about trust, we simply mean that the bank needs to see that you are paying your bills on time whether it’s for your car, mortgage, loans. Etc. These payments are usually made through your debit cards and are reported to the three major credit bureaus who calculate your credit score.


What if I Don't Have a Credit Score and Don't Pay Any Bills?

There are three easy solutions to help you get started on building your credit with no credit:
Open a secured credit card at a bank:

This is a credit card that requires a cash deposit and how ever much you deposit is your limit to spend per month. You are using your own money and are responsible for paying a monthly bill on time on the purchases you’ve made in that month. These payments will then be reported to the credit bureaus.

Become and authorized user:

Talk to a family member or a friend who has a good credit score and ask if you can become an authorized user on their credit card. Their credit will then become your credit as well.

Apply for a credit builder loan:

This is not your traditional loan where you are given the money upfront. Instead you agree to borrow a certain amount of money that is then deposited in a bank account help by a lender. All you need to do is make the monthly principal and interest payments until you are done paying off the loan. After it is done and you have made every payment on time, your credit score should increase, and you will get your money back.


Bottom line:

These easy solutions will help you build your credit and eventually you will be able to apply and get approved for different credit lines such as credit cards and loans . The higher your credit score, the higher credit limits you will get and the lower interest you will have to pay each month. Just because you do not currently have credit does not mean that you should lose hope, start building your credit today!