More than 18 percent of adults in the US are credit invisible. They have no record with any credit bureau. Credit can open doors to opportunities, so it’s important to establish a positive history.
It’s a chicken and egg situation when you don’t have a credit history. You don’t have a history, so you can’t borrow money, but you need a lender to take a chance on you to establish a credit history.
Did you know you can get an instant cash loan even if you have no credit history? Here’s how you can use these loans to build your credit.
Credit is when you borrow money from a lender and pay them back over time. Your credit history is how you behave with money.
If you pay your loan on time with interest, your credit score will be higher. If you borrow money and fail to pay it back or pay it late, it will count against you.
If you want to improve your credit history, the first thing you should do is get a copy of your credit report. If you’ve never borrowed money from an official lender, you may be expecting a blank report. It might surprise you to find your mobile phone account or an old membership.
Your credit report may include
Read the information on your report carefully. If you see incorrect information or it doesn’t apply to you, contact the business that issued the account and provide the correct information to the credit reporting company.
You can build your credit over time by borrowing money and making regular payments according to your loan agreement.
Before you borrow the money, be sure that your lender will be reporting your payment history to credit bureaus. Some lenders do not report unless you don’t repay the loan, so be sure to check their policies.
If you have a bank account, they may be willing to issue you a low-limit credit card based on your transaction history. If not, you could consider a secured credit card. You’ll have to keep a certain balance in your bank account, equal to your credit limit on the card.
Your credit limit might be small, but every month you pay the balance on time adds to your credit history. Eventually, you’ll build enough credibility and you will qualify for additional credit.
You can use an online credit marketplace that finds third-party lenders. They collect your personal information using an online application. Then they run a credit report and send your application to different lenders.
Your success will depend on availability in your state and the lenders’ loan conditions. If you have a low or zero credit history, begin with a small loan request. At Fast Loan Direct, you can apply for a loan as low as 500 dollars.
A lower loan amount will be more successful. When a lender accepts your application, they send a loan offer for you to review. Once you’re satisfied with the terms of the agreement, your signature will initiate the transfer of funds to your account.
It’s not instant credit, but it’s much faster than a traditional bank loan. When you make regular on-time payments, you will be building your credit history.
Many stores offer to finance your purchase over a short period during the holidays, interest-free. They allow you to make regular payments on your purchase the same way you would make payments on a loan. These are a great way to build credit history as long as you pay within the grace period.
Once you’ve built a good credit history, it’s essential to take care of it. Periodically check your account and take care of any incorrect information found on your report. Don’t apply for multiple credit cards at the same time.
Every time a business checks your report, the information is recorded. If your statement shows too many applications, it can appear as if you’re having trouble with your money. Be selective and proceed slowly as you build your credit.
Make payments on your instant loan by the due date. It helps to set a reminder several days in advance and try to make the payment early if you run into difficulty with your bank.
Manage how much credit you access by keeping your limits low. Banks and credit card companies want you to use more credit because that’s how they make money. They will increase your credit limit on your card to encourage you to spend more.
Keep track of unused accounts at retail stores. Close the account if you no longer shop there or don’t need to use their credit.
A credit score isn’t the same as credit history. A company calculates your credit score using its own formula. Each company may take slightly different factors into account so that you could have several different scores.
They look at the number and types of credit accounts you have, your payment history, and your credit utilization. Not all companies report credit information to all the three main credit bureaus, so your score for each of them might differ. They use similar data but might put a different weight on each one.
Credit utilization percentage measures how much of your available credit you’re using. If your cards are maxed out, you have a high utilization rate, harming your credit score.
We will send your application to our extensive network of lenders when you request a loan. We have access to more lenders, so you have more options.
At Fast Loan Direct, we make it easy for you to get an instant cash loan. Once approved, your funds will be deposited as soon as the next business day.