Credit can be a complicated concept especially for someone who does not have any credit history. Without any credit history, employers, insurance firms, and credit card companies may not be able to determine the repayment habits of the borrowers. This makes it difficult for one to get credit from the respective sources. One of the fastest ways to build credit is by use of a credit card. However, the main challenge is that one cannot get a credit card without a good credit history, this ends up to be a vicious circle. While this seems a challenge that cannot be addressed, there are four ways of handling the issue.
One can build credit while paying off existing debt without using a credit card. An example of such is the student loans. Paying back loans fully and in good time can be used to confirm that one has a good loan repayment habit. The credit bureaus can demonstrate to potential lenders that you handle debts responsibly. Rent can also build credit when you make on-time payments and record the payments with credit reporting agencies. However, if your landlord does not offer this service, you can still use other services that report your payment of rent to credit agencies.
Another option is to apply for a secured credit card. This can be very useful for those who are just beginning to build their credit score. The secured credit card can be used to purchase items and make payments before the due date. This card uses cash deposit as the credit line for the account.
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