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How to Establish New Credit History

It is difficult and even frustrating when you are trying to apply for a loan or credit but no one’s approving it simply because you do not have any credit history. Ironically, how can you get credit history if no one is willing to give you any, right? Fortunately, there are things that you can do to get started establishing a good credit history.

Identify the qualifications of the lenders

Most of the lenders are very particular on the gauge or FICO scores to measure how responsible a borrower is in handling his or her previous credits. Since you do not have any credit history, it is obvious that you do not have any of those scores. With that, lenders are looking for other considerations, like:

  • Bank accounts- This will not give you any credit scores. But your account history is a very important component in ensuring the lenders can trust you.
  • Employment history- This is another indicator for the lenders to see if you can be granted a credit or loan. As they will check your existing employment and period of stay, they can get an idea if you can manage a stable job, which can mean you can be a responsible payer as well.
  • History of residence- Lenders are also interested in how often you move and if your home is owned or rented. Like checking your employment records, they also want to check your residence stability to give them a guarantee that you can be trusted.
  • Utility bills- Telephone, cable, and electric bills under your name can help lenders assess how responsible you are in paying these obligations, which can give them an idea if you will be also responsible for paying them.
Start with the bank you are in.

credit repairTo boost your chances of getting credit, you can also start applying for a savings account. This is helpful because this can be a good proof that you have a stable account on that bank and that you trust that institution. 

Apply for a department store’s credit card.

credit card

Your favorite shopping center probably offered you store cards that promise you more discounts and perks for every peso you purchase. While this can be a not-so-good idea and can tempt you to spend more, this can be an opportunity to get the credit history you are looking for. You can ask the types of cards it offers and check what can work for you. However, remember that the purpose is to establish a good credit history and this card is not a privileged tool to shop more, nor this is for free. 

If all else fails, switch to the secured loans.

Analyzing the mentioned tips, the point here is that lenders are not just looking for guarantees if they can be paid well, but also what they can get if you fail to pay them. If these tips fail you, head on to the so-called secured loans. This means if you have a mortgage and car loans, these can be used to secure the lenders that they can get something from you if all else fails.