How to Establish a Credit Rating
Perhaps your problem isn’t bad credit; it is that you have no credit at all or insufficient credit. If you’ve never financed a car loan, a computer, or other major purchase, how do you begin to establish credit? How do you get approved for a car loan? Doing the following should help you obtain credit:
(5) Have a telephone number in your name. If you don’t have a telephone number at all, you will not get unsecured credit. Likewise, if you can be contacted only from a telephone number that belongs to your Uncle Joe’s second cousin, this will make lenders very nervous and they will be much more likely to decline to give you credit.
(6) Have checking and savings accounts. There is a reason that you are often asked if you have a checking or savings account when applying for credit. This is used to assess your creditworthiness. Answering “yes” boosts your odds of getting credit; answering “no” does the opposite. You can open a free checking account for as little as $100 in many places and increase your odds of getting approved a little bit by checking “yes” on the application when asked if you have a checking / savings account.
(7) Stay in one place. If you move from apartment to apartment or city to city, this will send up red flags all over the place. Lenders are concerned about you disappearing and not being able to locate you. Living at the same address for a long time boosts your odds of getting approved. The longer you stay at one address, the better.
(8) Stay at the same job. Moving from job-to-job is frowned on by lenders, too, because it shows instability and makes them less likely to approve your application, particularly when you have no credit history. If you can’t keep a job and you have no credit history, you’re at a much higher risk of being unemployed and, consequently, unable to pay your debts. Working for the same employer for a long time boosts your odds of getting approved.