When a consumer does not have a credit history, banks may refuse to credit him. Therefore, many of us have to “grow” CI systematically, starting with small loans. How long can it take to build an adequate assessment? You will not be able to achieve a positive result overnight. But with the right strategy, you can, of course, speed up the process.
There is good news. It is not necessary to increase the rating of your rating from scratch. Most often, the initial estimate of each of us varies from 300 to 850. There is no such thing as a zero credit score.
All credit scores are based on the information contained in the credit history. If your credit report is still empty, then no scoring model will be able to generate a final score. In the banking world, this means that your credit history does not meet the minimum acceptable values. Until you have completed any credit operations, there are no points in your history at all.
How to start your credit history?
In order for the score to appear in the report, you need to record the first entries in the history. In other words, you need to take a loan or a loan. However, getting a loan for the first time can be challenging. Many lenders do not want to deal with such a client because they can not clearly calculate their risks.
1. Secured credit card
In America, this method is quite popular. In addition, it is a good way to fix a bad credit history. A secured credit card presents a very small risk to the lender, since it is necessary to place a deposit with the issuing bank before receiving it.
Because of the reduced risks for the lender, such cards usually have very simple criteria for approval. This means that the bank may be willing to take a small risk and give you a loan without a credit history. This service was created so that the consumer could prove that he is able to properly manage his finances and responsibly treat debt obligations. But, if you decide to take advantage of this opportunity, treat it as an important exam, on which your future life depends.
2. Take a microloan
Another way to create a credit history is to take a microloan or a special small loan from a bank. The first amount should be negligible. Let it be a credit card for 10 or even 5 thousand rubles. But “scrolling” this amount several times without making delinquencies, the bank will offer you a large amount. Thus, within 6 – 12 months you will receive a positive credit score and a partner bank, which has already granted you a limit of 50 – 80 thousand rubles.
If for any reason banks refuse you a small loan, do not despair, apply for a microloan to the MFI. Here, the requirements for a potential borrower are several times smaller, and the initial amount for opening a credit history can be obtained within a few days.
3. Authorized User Accounts Credit
A rather unusual way that may well work to make the first entries in your credit history. The method consists in that the active borrower adds a credit to the user’s existing credit account, which, in turn, can use the funds in the account and make payments.
Do not abuse this method. The fact is that if only a new user will make loan payments, then the original borrower will worsen its credit history.
Once you have established your credit score, the main task is to grow and maintain its strength. Plan your finances wisely, because for good scoring, you just need never to miss mandatory payments and maintain a low level of credit on a credit card.