Credit Reports And Employment
2010
how can I establish credit without prior employment history?
I am on ssi and I have never worked before and I want to establish credit. plus my husband has a very expencive medical bills that we can’t pay and it is on my credit report. I want to know what do I need to do to establish credit.
I have to make decisions everyday on whether to approve or deny people that apply for credit. If I had to give advice to people that are trying to start out building credit, this is the advice that I would give:
1. Open a checking account- While opening the account doesn’t directly build your credit, it does create a relationship between you and the bank by being an accountholder. Banks love to cater to their preferred customers that have accounts in great standing by offering loans and credit cards. Also, having a checking account not only helps manage your money, but it gives you the most powerful tool in building credit, a checking account to help pay your bills on time. Most banks and credit unions offer online banking with billpay that can make it easy for you to pay your bills on time, which is important in building credit.
2. Open a secured credit card- Secured credit cards are the easiest credit cards to get, mainly becuase a security deposit is placed upfront in order to establish a line of credit in the same amount. For example, if you deposit $250, your credit limit is $250, and so on. The deposit isn’t used to pay for any of the purchsases on the card unless, it was charged off and sent to collections, so you would have to repay it just like a regular card either in full or minimum monthly payments. The deposit is sometimes linked to a savings account, so it earns interest while you’re building credit, so the deposit isn’t sitting there. You can think of this as building credit with a savings account. The more you deposit, the higher your limit, which is good for your score because it creates a cushion between the total debt you owe and the credit you have available. Also, by continuing to add to the deposit, you’re also creating an emergency fund at the same time. A good way of using the card is by making small purchases ($20/month max) and paying on time every month while adding to the deposit. Usually after a year or so, the card either converts or upgrades to a regular card, and most importantly, the deposit is given back, which you can place in a savings account as an emergency fund.
3. Enroll with PRBC- PRBC is America’s Alternative Credit Bureau, providing a helpful service to the over 50 million people with limited or no credit history. If you pay your monthly bills on time, PRBC can help you build credit to qualify for a mortgage and better interest rates.On-time payments for the following bills are not reported to the traditional credit bureaus:
Rent
Cable
Phone
Daycare
Insurance
Electric
Natural Gas
Cell Phone
The only time your payments for these bills are reported to the other credit bureaus is if they’re missing or late.With PRBC, your on-time payments count. You build credit for paying your bills on time, even if you have no credit history. PRBC offers two simple ways to start building credit today.
In closing, just a few more things to keep in mind.
-Don’t spend more than 30% of your combined available credit on all your cards.
-Only apply for credit when necessary.
-Dont close unused accounts.
-Pay on time
Hope this helps…
Thanks for reading and…
Good luck!
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