[H]aving no credit is almost as bad as having bad credit. Many creditors are unwilling to lend to you if you have no credit history, but you can’t establish a credit history if no one will take a chance on you. This catch-22 can leave you feeling frustrated, but don’t worry. There are ways of building a good credit history even if you have none now.
Start with a Credit Card
Look for a credit card that accepts people with no credit history. This will often be a secured credit card where you pay a deposit and you receive a credit limit equal to the deposit amount. Look for cards that will switch over to unsecured with a certain number of on-time payments so you can get your deposit back.
Pay Your Bills on Time
While paying utilities, rent and other bills don’t impact your credit score for good, they can give you bad credit if you don’t pay them. Paying your credit card bills each month before the due date will help you build a solid credit history.
You can also ask your landlord if they will report your on-time rent payments to the credit bureaus. Some landlords are willing to do this and there are sites that make this task easier.
Keep Your Debt Low
When you get a credit card, keep your balance low. This will help you establish good credit from the beginning, as well as minimizing the amount of debt you accumulate. One important thing to remember is that you must pay off any balance before the statement date so that it will report with a zero balance. Otherwise, you will show a balance on your credit report even if you pay it off every month.
Develop Patience
It takes time to build credit and it is a process you can’t hurry. Credit bureaus seldom even consider your credit until it is at least six months old. Once you reach that point, you will begin to notice that you do have a credit score, so work hard to ensure that it continues to climb to the point where it is considered good or excellent.