Getting credit when you don’t have any is one of the modern commercial system’s great ironies. How to get around it is challenging for people who believe cash is king and conduct their transactional lives accordingly.

How to get around it is challenging for people who believe cash is king and conduct their transactional lives accordingly.

I have a friend, who for the first few years of his economically active life, bought everything for cash. And he would proudly tell everybody about his cash-paying policy. That was until one day when he wanted something with a much higher price tag and needed to apply for a credit facility. He was turned down, much to his despair, for not having any credit history.

That was until one day when he wanted something with a much higher price tag and needed to apply for a credit facility. He was turned down, much to his despair, for not having any credit history.

This is a dilemma for many. But fortunately, there are ways around it.

There are two fundamental things that will help you along your way:

  • regular income
  • banking account

Although it may sound like stating the obvious, you need to have a bank account.

This is the first point of reference that a would-be lender will look into to verify your potential credit worthiness.

Without a regular income that you can prove, your chances of credit will be severely diminished.

Assuming you are good to go on these two fundamentals, the next thing to do is apply for credit at a retail outlet.  Cellular contracts have become prolific and even a contract for your mobile counts as credit. Other than cellular store accounts are much easier to open because their screening processes are more lenient and their risks are lower. These accounts or contracts are quite handy because they can tie into your primary needs such as data, clothing, sporting goods etc.

What’s great about store accounts is that they are often pushing promotions at you to open credit by offering free vouchers with a new account and because they are pushing the offer at you, it’s very unlikely your credit will be refused.

There are 2.5 billion people without a credit score due to the fact that they have never participated in formal credit activity.

These people are considered high risk as there is no facility for the potential lender to verify their credit behaviour, to reach an agreement with reasonable terms of interest.

Micro lenders step into this breach. The provide credit with no security.  Usually, they are willing to lend you money without security and without credit information, but then the terms are prohibitive and the interest is very high. It’s one way to get credit but I don’t recommend it unless you face desperate circumstances.

The other easy option to start credit is with a debit card. This way the money is in your account before you can use it so the bank takes no risk, but will charge you administration fees. The plus side is you don’t need to carry cash around with you all the time, you get a sense of managing your money cash-lessly and you begin to build a credit profile with your bank.

With all methods it’s critical to pay on time every month. Failing to do this will do your credit rating more harm than good.

Credit is a valuable resource when managed correctly and it’s worth striving for.

Good luck. Please let me know how it goes

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