When having no Credit History Makes Life Harder

The credit scoring industry has expanded into a huge business, affecting almost all areas of life. Those with no credit history will find life is more expensive and can be much harder. Typical groups that have no credit history are the young, divorcees, immigrants, and those who have chosen to avoid credit for personal reasons.

The only way to acquire a credit history is to apply for and use some form of credit, but this does not necessarily mean one needs to go into debt. Simple, responsible use of a credit card can create a credit history. This in turn can result in a high credit score over time, which then opens the doors which require a good credit history.

A credit history cannot be built overnight, thus anyone thinking forward to renting or purchasing a home, considering their career prospects, or borrowing at preferential interest rates, should endeavour to establish a credit history.

Having no credit history can make the simple things that one takes for granted more difficult. Renting an apartment most often requires a credit check. With no credit history to consider the landlord has no way of assessing the likelihood of the prospective tenant paying their rent in a timely fashion.

Mortgages can cost far more over the long term without a solid credit history which helps to secure home loans at low interest rates. Credit history can be established through other means than by using credit in order to obtain a mortgage, but interest rates will inevitably be higher.

Obtaining a car loan is possible with no credit history but the interest rates charged will be at the high end. The insurance will be also be far more expensive as insurers take credit into account when they set their rates.

Prospective employers are increasingly requiring a credit check on applicants. The applicant with a good credit history may appear preferable to the applicant with no credit history, as the former has established a pattern of responsibility whilst the latter is an unknown quantity.

Students may acquire federal student loans with no credit history, but those who require additional funding in the form of private student loans will need a responsible co-signer unless they have an established credit history.

Borrowing for whatever purpose is restricted without a credit history. Those with no credit history may find themselves reliant on pay day loan lenders, home credit, or pawn shops, if a loan is required. Even obtaining an unsecured credit card requires a credit history in most instances, though this can be acquired through the use of secured credit cards. This is a proven method to moving to unsecured credit and far preferable to simply settling for prepaid cards which rarely enable a credit history to be built.

The credit scoring industry has made a credit history an indispensable asset for the majority, with lenders now targeting those with no credit histories as potential borrowers. To become credit worthy however they will first need to establish a credit history. Credit scoring is tipped in the favor of the businesses that turn a profit in producing credit scores. Attempting to get by without a credit history can make life harder and more expensive in the long run.