Building Credit From Scratch

Sometimes having no credit history can be worse than having a bad credit history. Even borrowers who have gone through bankruptcies and other financially damaging situations can obtain specialised loan products like bad credit home loans.

Fortunately, there are strategic ways to build a credit history if you’re starting from scratch.

First, keep in mind that applying for credit cards willy nilly is not the way to go. It’s important to build a relationship over time with a credit provider, so be selective and pay your bills on time. Avoid sending out multiple applications with no rhyme or reason, as this could do more harm than good.

Get a credit card

Apply for a credit card from the bank you currently have an account with. Debit cards do not establish a credit history, so make sure you obtain the right kind of card.

If you’re unable to get a credit card, try obtaining a store credit card that works with specific retailers. These applications are generally easier to qualify for and can help you build up your credit profile by making purchases at the store and paying them off quickly.

Become an authorised user

One solid strategy for building your score is letting someone else’s sterling credit history do the heavy lifting for you. If you’re able to become an authorised user on a relative’s credit account, their good score will reflect well on you.

However, keep in mind that mistakes on your part won’t just hurt your score, but theirs as well, so it’s even more important to pay off your debts when you make purchases as an authorised user.

If you find yourself struggling to obtain finance because of a bad credit score, contact the specialists at Redrock and explore your options concerning bad credit mortgages.