How to Build Credit From No Credit: Effective Money Management
One of the most essential things that a person has to consider whenever he or she has to borrow money from any lender, be it a bank, a company or even an individual, is the amount of credit that he or she has. This is because these aforementioned moneylenders scrutinize a person’s credit thoroughly before they can determine whether he or she is indeed a financially stable person who will be able to pay off their loans at the designated time. A good credit is what will enable a person to get loans for purchases such as cars, houses, and other important purchases.
And since a person’s credit is their ticket to landing those desired loans from moneylenders, it is important that they should be able to establish a good credit history, especially for people who have only recently acquired their credit cards and are mulling their options on getting loans. Prospective lenders immediately see a person with good credit history as a person who has credibility and will be able to manage the money that will be given to them.
For people who have only recently received their credit cards and are wondering on how to build credit from no credit, what they have to keep in mind is that acquiring a credit card also entails them with several responsibilities. One of which is to be able to properly organize and manage their expenses, which will effectively keep them from getting these risky loans in the first place.
A good way to start for people who wish to build their credit is to search the internet for websites that offer prepaid debit or credit cards. These cards, unlike conventional credit cards, do not require its owners a credit history, and will even serve to their advantage if they wish to earn small amounts of money from using this type of credit card. Another way of building a good credit history from scratch would be for a person to refrain from purchasing items that they know are beyond their budget, except in cases of emergency. They must also make sure that they constantly pay off their debts, even in small amounts, so that they will not pile up and become too much for them in the long run.
But perhaps the most important thing for people who wish to build good credit history from scratch is that they should remember that incurring credit means having debts, debts which have to be paid in due time. If people have the urgency to pay off their debts and are more prudent in spending and managing their money, then they are sure to be able to build good credit history from having no credit.
read moreWhy Is It Important To Know My Credit Score?
Why is it important to know my credit score? The credit score is a measure of your credit-worthiness, or your ability to acquire new credit. Credit scores can range from the lowest score of 300 to the highest, 850. If you have a low credit score, you may have trouble getting approved for loans or be charged higher interest rates on the loans that you get. A credit score below 600 is considered poor while one above 720 is considered good. How can I know my credit score?
What are Credit Bureaus?
The first step to know my credit score is to be familiar with the different credit reporting bureaus. These organizations track the credit information of individuals and aggregate them into a credit report. The major agencies are Equifax, TransUnion and Experian, who collect the information from various creditors such as banks as well as public sources such as bankruptcy filings. Although the three agencies share information, they also create their own distinct credit reports, which is why it is important that if you want to know my credit score accurately you will have to ask for reports from all of them since you may get different results. We are all entitled to one free report from every credit bureau a year and only have to pay for additional reports.
Why Is It So Low?
Once you look at your credit scores by looking over the credit reports, you may be surprised at how low they are. If you pay your debts religiously but your scores are still low, there may be errors in your credit report. If your credit score is too low, you can make it higher by disputing any errors you find on your report. For example, there may have been some debts that have been reported twice or ones that you’ve already paid but are still on the report and you know my credit score will be pulled down.
How Is It Computed?
An important aspect to better understand your credit score is knowing how it is computed. Once you know this, you can take steps to improve your creditworthiness in order to raise your score. Thirty-five percent of your score is computed based on how promptly you pay your debts. If you pay on or before the due date, then your credit score should be high. Another thirty percent of your score is based on how much you owe vs. your total credit limit. If your total debts are close to your credit limit, your credit score will be low. Another 15% is based on your credit history or how long you’ve been availing of credit. The last 20% is divided between new debts and how many different types of credit you have so you know my credit score will be high if you keep credit cards active even if you don’t want to use them anymore. If you have a lot of new applications for credit, you know my credit score will be low due to an increased number of credit inquiries reflected on your report. And if you strive to have a variety of credit types such as different types of credit cards, then you know my credit score will be high.
read more658: Recommended Credit Cards for a Credit Score of 658
Credit Score of 658 Recommended Credit Cards
A credit score (also known as FICO scores) of 658 fall in the range of average. The best credit cards and lowest interest rates are typically reserved for those with credit scores above 700, although you can still get a good deal on a credit card with a credit score in the high six hundreds. If you don’t know your credit score there are plenty of places you can check for free.
Fun info: The score of 658 is a very average score and according to Steve Bucci 40% of people have a very similar score between 620-745.
The two best credit cards you could get with a credit score of 655:
Chase Freedom: You might not get accepted with a low 600 score but it still does happen regularly so it’s worth a shot. They have some of the best cash rewards with 1% cash back on all purchases. The Freedom Card is best for applicants who do not carry a balance.
Citi Simplicity Card: If you don’t like the Chase Freedom card because you like carry a balance on your credit card the Citi Simplicity credit card is a great alternative. With a competitive interest rate, no late fees, and no penalty APRs, the Simplicity card will save you money and make your life easier.
Find more tips for your credit score range and tips for other credit score ranges here-
read moreDo You Have A Credit Score of 655? Recommended Credit Cards.
If you have a credit score of 655 you drop into the average category. The best credit cards and lowest interest rates are typically reserved for those with credit scores above 700, although you can still get a good deal on a credit card with a credit score in the high six hundreds. If you’re curious as to what your credit score is, you can check your credit score for free.
Fun info: Most people fall into the “good” credit range. According to a Bankrate article by Steve Bucci entitled, “Grading Your FICO Score,” 40 percent of people fall into the middle ranges: 20 percent of the population earn a score between 620 and 690, and another 20 percent receive a score between 690 and 745. Generally, those earning a score above 650 will receive the lowest interest rates, with further reductions for higher scores.
The two best credit cards you could get with a credit score of 655:
Chase Freedom – The Chase Freedom combines some of the best cash rewards (1% back on all purchases plus 5% back on rotating categories) with a good chance of approval for applicants with credit scores in the high 600s. A Chase Freedom card is ideal if you don’t regularly carry a balance.
Citi Simplicity Card – If you sometimes carry a balance on your credit card, the Citi Simplicity Card is the best choice. The Simplicity card is designed to make your life easier with no late fees, no penalty APRs, and competitive interest rates.
Is your credit score not 655? Find more top credit cards for your credit score (FICO score) range:
Have A Credit Score Of 520? How To Fix Bad Credit.
520: Poor Score - Interest rates with a credit score in this range are going to be very high when getting a loan. It would be a wise move to get loans to consolidate debt so that you are not carrying more debts on your record. You don’t want to make things worse by not making a payment so be sure you can pay it all off on time before taking the route.
With a credit score as low as 520 you won’t be eligible for a majority of top quality credit cards. The good news is that you can get credit cards that will help you rebuild good credit. I am assuming you already have checked your credit score and know all the benefits?
Credit cards recommended for your credit score of 520.
Orchard Bank Classic MasterCard – Orchard Bank MasterCards are an ideal choice for applicants with fair or average credit, providing universal acceptance, superior customer service, and competitive APRs based upon your individual credit. If you’re worried about your credit being to bad they also provide a secured credit card option.
Prepaid Visa by AccountNow: You can help build your credit without credit checks with the AccountNow Prepaid Visa. It works like a debit card-you load is up with cash or have your paycheck directly deposited to it. It has a really cool twist though; you don’t have to wait for it to enter the account before you can spend it. This gets reported to the credit bureaus by AccountNow and dramatically helps rebuild your credit.
Need help with another credit score that’s not 520? We have plenty of other tips here -
http://www.knowmycreditscore.com/credit-score/
read moreIs Your Credit Score 500? What to Do Next.
Your Credit Score (500) Rating: Poor
Interest rates with a credit score in this range are going to be very high when getting a loan. You don’t want more debt on your record so it would be a smart move to get loans that consolidate debt. You don’t want to make things worse by not making a payment so be sure you can pay it all off on time before taking the route.
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With a credit score as low as 500 you won’t be eligible for a majority of top quality credit cards. Instead of looking for the best deal you can get with your score you should instead look for credit cards that help rebuild credit. I am assuming you already have checked your credit score and know all the benefits? If you haven’t already I recommend checking my article – Here.
Credit cards recommended for your credit score of 500.
Classic MasterCard by Orchard Bank: They provide universal acceptance, a great choice if you have fair to average credit, competitive APRs, and some of the best customer service. If you’re worried about your credit being to bad they also provide a secured credit card option.
Prepaid Visa by AccountNow: You can help build your credit without credit checks with the AccountNow Prepaid Visa. You load it with cash or use direct deposits like a debit cards. It has a really cool twist though; you don’t have to wait for it to enter the account before you can spend it. This gets reported to the credit bureaus by AccountNow and dramatically helps rebuild your credit.
Need help with another credit score? We have plenty of other tips here -
http://www.knowmycreditscore.com/credit-score/
read more