No Credit History: Take These Steps to Get Started

Category: Credit Matters Published: Saturday, 20 December 2014 Written by Admin

With no credit history, you'll have a hard time getting a loan, a credit card and possibly even finding a place to live. But you need these things to establish credit and gain that credit history. It's a conundrum that people have dealt with for decades, but one that can be solved by careful planning and building your credit step by step, from the ground up.

1. Educate yourself

How you use your credit can affect you for years to come, so you owe it to your future self to get educated on all credit matters. NerdWallet offers several useful guides for people with no credit, including credit card comparison tools that will help you choose the best card for your situation.

2. Check your credit score and credit report

Although you might think you have no credit, it pays to know exactly where you stand. Check your credit score and get a copy of your credit report. You can get one free credit report a year through You'll have to go elsewhere for your score. Not all scoring systems are the same, and some websites will charge you to review yours. Read the fine print before signing up for anything to make sure you aren't nailed with recurring fees.

Once you have your score and report in your hands, review them for any entries you were unaware of, or any errors. Make note of your score now so you can track it as you build a history.

3. Get a no credit credit card

Most people find secured cards to be the best option for their first time credit cards. These cards require you to make a deposit. The deposit is used as security that you'll make your payments, so the bank isn't risking much even if you don't have a lengthy credit history. By establishing good credit habits with this card, you can build your credit enough to eventually qualify for an unsecured card.

4. Establish a budget and use your credit wisely

Knowing how much you can spend each month will help keep you from getting into trouble with a credit card. People often mar their credit history by utilizing too much of their available credit, or carrying a high balance every month. Using more than 30% of your credit limit could hurt your history, so although you want to use your card often, you also need to limit yourself. Setting your budget ahead of time makes this possible.

5. Make your payments on time

On-time payments account for 35% of your credit score. Don't be late. Your goal in establishing good credit is to make all of your payments on schedule.

Having no credit history is starting with a blank slate. Fortunately, there are credit cards for people with no credit, and other solutions for building an impressive financial track record. With careful planning, you can begin building a good credit score that will benefit you long into the future.

Woman using a credit card image via iStock.

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