Most of the young people find themselves short of funds when they are students or trying to set up a venture. Getting a loan with no credit history is as difficult as it is for people with bad credit. You may require funds for funding a course, buying a car, or to start a new business. It is a fact that you need a credit history to even get an apartment on rent or to buy the books with credit card online payment. Though you do not have a bad credit history, none is worse than bad in the eyes of banks and other money lenders who are always interested in safeguarding their financial interest. How do you let a bank know that you are trustworthy?
Get a credit card
Apply for a credit card but make sure that that there is no false credit report already open in your name. Start buying things and services and pay using your credit card. Pay on time and build a credit history to let lenders assess your credit worthiness easily. This will take some time but it will make it very easy to apply for a loan once you have a credit history behind you.
If you have a savings account in your name in a bank, deposit money and withdraw using ATM regularly to have a statement with you when you apply for a loan from a bank. Your credit report does not have any details of your saving account but lenders are always interested in your transactions with your bank. They want to make sure that you have experience in handling your own money in a bank account. Pay your bills of utilities through check to get the transaction recorded in your bank statement.
Buy something on installments
Buy anything that you need on installments. It could be a television, a washing machine, or even a smartphone. Pay the EMI’s to the company using your credit card. If you have paid all installments on time, your credit history becomes good and you are perceived as trustworthy by the lenders.
Your employment history is important for the lender
If you have been working with an employer for some time and your salary has been increasing, it is seen as a sign of your trustworthiness. Your employment history is mentioned in your credit card report. What the lenders are looking for is stability on your part. If you are not jumping from one job to another and your salary has been rising, you are seen as a good prospect for loan. Do not forget to submit your income tax returns for the last two years at the time of applying for a loan.