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| *Loan,banking and credit>>>credit score |
When it says I don't have a credit history does that mean that my credit score isn't bad? |
I don't know why I always fear that my credit score is bad even though I don't have debt or anything. When I try to apply for things they always tell me I don't have enough credit history to apply, what does that mean? just what you said, You do not have dept or anything. Go to your bank and tell them you want to establish credit. You would like to borrow $500. to $1000. and put the money up in a saving acct, Do not spend it. Pay it back plus you must pay interest at the time of due date. Ask for a very good interest rate.. I would finance the note for 6 months and the interest should not be much. Do this a couple of times to establish credit. Then you can probably buy a car when the time comes. Imagine that we're talking tennis instead of credit. Let's say that you enter a tournament, having NEVER played tennis before in your life. They cannot handicap you--i.e., they cannot put you into a group of similarly skilled players, because ... you've never played, you've never established how good or bad you are. They have NOTHING to go on. That's what no credit history means. Some people borrow money that first time and are late on their payments and maybe default on the loan. Others pay on time and pay their bill. BOTH have now established a little credit history, but not much. The idea behind credit history is that people tend to live their lives in a patternistic way. People who start out paying their bills tend to keep on doing so and people who start out not paying them ALSO tend to keep doing so. So, the MORE history they have to go on, the better the predictor of how good or bad of a risk you are. After all, there is NO REASON to lend you money if you aren't going to pay it back, right? They are looking for clues and with NO CREDIT HISTORY, they have NO CLUES. So, a BAD CREDIT HISTORY is way worse than no credit history, but no credit history is way worse than a great credit history. Bad credit risks are KNOWN entities. You're an unknown entity. That not knowing makes them nervous. What is worse, bad credit or no credit? The answer is no credit. Creditors look at how much you have established yourself before making a decision to issue credit. So what is the best way to establish yourself if no one will give you credit? First let me tell you the worst way. Don't apply for department store or E-retailer cards! They are the worst. Contact a strong credit issuer like a Capital One or Citi and set up an account for a "Secured" credit card. This is a great way to get yourself going. Please be careful and use your credit wisely. Sometimes I wish I had no credit. When consumers do not have a trade line reporting monthly to the 3 major bureaus then this an insufficient credit history. You should apply for a secured credit card, or if your parents can add you as a authorized user only to one of their credit cards, or a car loan. It quite a "cat chasing it's tail" when it comes to credit. You can't get it because you do not have it, but you don't have it because no one will give you a first account. Below is the FTC website giving you your rights as a consumer under the Fair Credit reporting Act. Maybe it will help! FHA DE Underwriter and credit analyst since 1979 Consumers with missing credit scores are usually bypassed by creditors because they are taking a huge risk while knowing very little about you. Like others have said, find a secured credit card or get a credit card with a low credit limit. Use it one time per year for a very low amount (i.e. $5), pay the debt off. Now you established credit. |
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