It is very frustrating to know that you need a loan, or you need to make an investment for your business but when you go to the bank your application is denied due to lack of credit history. It is very important to understand that having no credit history is much better than having bad credit. All we have to start doing is planning to start establishing your credit right away.
There are people who believe that if you have a cell phone account, or electricity or pay rent this affects your credit, and this is only partially true. If you make your payments on time and do not fall behind, this information will NOT be in your credit, only when your account is in a delinquent state (usually after 90 days of not paying) is it going to affect your credit. Your bank deposit account also has nothing to do with your credit, but it will help you if you want to establish a credit relationship with your bank.
Secured credit cards and secured loans
The easiest way to obtain credit is to open a secured credit card. To obtain this card you will have to deposit in this bank the same amount of the account in a certificate of deposit or in a savings account as a guarantee in case you do not fulfill this obligation. The bank will give you the card with the same amount (say $ 500) with a competitive interest. You can use this card like any other, remember to make your payments on time and not leave a balance of more than 30% of your card. The money you invested as a deposit will be returned to you after a few years with accrued interest and you will have credit.
After six months to a year you can apply to other cards with better interest and a higher limit. Visit the post on how to reduce your interests with a call.
Remember these tips:
- Do not apply to cards that have an annual fee (annual fee)
- It only applies to cards that have a recognized logo such as Master Card, Visa or American Express.
- Do not apply for store cards (macys, radioshack, target, etc.), these usually have a very high interest. If they have a non-interest offer for a certain time, be sure to pay the full balance before the offer expires, but they will charge you all the exempted interest. Also make sure you can use these specials again, for example an electronics store.
- Do not get more than two or three cards, it could affect your score and it is more difficult.
- This takes time, be patient and you will have very good credit.