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How to Build Credit History from Scratch

Im new to US how to build Credit history?
Im a student I dont have credit ?

If you are just entering real world from college or Started living on your income, you will need to start thinking about your credit. With a zero credit history it is difficult to get a Cell Phone connection, Rental apartment or a credit card. Or if you have moved into US with a Job and just have taken a SSN, it is very important for you to start building your credit.

The first time you take a loan or a credit card you start building your credit history. But the problem is many companies wont offer you either one, if you don’t have a good credit record earlier. This is where it gets irritating for many, especially if you haven’t opened a student credit card or taken a loan it is very difficult to do so after a while.

The best option is to try and convincing your banker to provide a credit card, in most cases a very basic or a secured credit card. Make sure they report to credit Bureaus and as a normal credit card. Debit Cards don’t help you build credit, so try making use of your credit cards at least once in a while.

Once you start maintaining your credit cards without being late in payments, you start building credit and you will eventually get more offers. But you should be very careful in not over zealously in using your new gained freedom, because if you misuse or overuse your credit and make mistakes.

Some of the following Banks offer Credit Cards for starters and secured cards

1. Capital One – Starter + Secured
2. Discover Cards – Starter Cards + Student Cards
3. Public Savings Bank – Secured Credit Cards
4. Wells Fargo – Secured Credit Card + Students Credit Card
5. US Bank – Secured Credit Card

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What items appear in your credit History?

The following post answers the following queries
1. What are tracked in a credit report?
2. When do items get into Credit History?
3. Is my address tracked in Credit Reports

Typically anyone providing you a credit reports to Credit bureaus. This includes Credit Card Companies, Automobile financing institutions and Mortgage Loan providers as well. Credit Card Companies will report monthly to the Credit Bureaus your monthly balance , total credit approved and whether Paid as Agreed or Delinquent in payments. Most Credit Card companies report to one or two Bureaus. But there are some companies which report to all the three Bureaus. Mortgage companies also report monthly to the credit Bureaus.

The items which get onto your credit score these days can vary from your electricity bills to Car Loans.But In most cases the Utilities , Cable or Telephone companies wont report to credit Bureaus unless your account is severely due and your case is transferred to a Collection Agency.

Also anyone you enter an agreement with like an apartment Leasing office also can post Negative remarks on your credit file.The negative items will have the account number and the payment pending details along with whom to contact regarding the Balance Due.

Apart from the credit information all the companies also report your last known billing address and Credit History report also becomes a way to track your various locations and movement. Each enquiry on your credit Report also gets stored in the Credit report, it is a way Creditors look for how much Credit you are applying.

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What is credit History and Credit Worthiness ?

We are going to go over the basics of Credit and Credit Reporting in upcoming articles. This post answers the following queries.

  • What is credit History and Credit Worthiness ?
  • Who monitors my Credit ?
  • Are credit Bureaus

Credit History is a significant factor in every walk of life in US. Credit worthiness plays a key role in getting that High profile job , a low interest mortgage or Nice rental in a good neighbourhood.

But many are surprised to know that a person’s credit history is not reported to Govt, rather it is a group private organisations who maintain the records. Equifax , Experian and Transunion are the Credit Bureaus of US. They maintain the record of any individual associated with Reported Credit Activity.

Not all the three Bureaus have the same data about an individual, the data depends on the lender’s reporting Bureau. Most lenders report to one or two Bureau at a time.

In the upcoming articles, I will be talking about Credit history , Credit Building and much more about how you can save thousands every year by just doing basic things right.