(ThyBlackMan.com) No credit score means you do not have a credit history. If you’ve been told this by your banker, it’s time to build your first-time credit score. It is important because the number on your credit score report represents your credit worthiness which means it makes you eligible or ineligible for the credit. Following are the easiest and the most effective ways to build credit score for the first time.
Credit-builder loan
It may seem a little crazy, but credit-builder loans actually work. This type of loan also helps beginners get disciplined and helps them learn more about affordability. Before taking a loan, some people assume that they can easily repay the amount, but when things don’t go as per their plans they regret. For credit building, some financial institutions deposit a small amount of money into an 
account for the applicant. The borrower usually doesn’t have access to this account but he pays the money back with interest in monthly installments. After repaying the amount, the borrower receives the money with or without interest depending on the policies set by the lender. The report sent by the lender plays a major role in determining your credit score. For those with bad credit history or no credit history, credit-builder loans work really well.
Get a credit card
This is the easiest and the most reliable way to build a credit score for beginners. The idea is very simple. You get a credit card, make some payments within your credit limit and start paying your credit card bills on time. However, you must get yourself familiar with credit card jargon to avoid any confusion. Many banks offer credit cards to those with no credit history, but if all of your attempts have failed at banks, try getting a retail store credit card and establish a credit history by using it for some time. Later your credit history can help you get a major Visa or Mastercard powered credit card.
Take the help of a family member or friend
If you can, ask your friend or a family member to make you an authorized user of their credit card. This is going to be a very personal question, so choose the right person for this. If they agree, ask them to show their credit history report. It is important to check whether their own account is in good standing or not. Pay extra attention to their payment history (late payments are bad), dues, and the overall status of their account. If everything looks good, then you can consider becoming an authorized user as it will help you build your credit score.
Get a secured credit card
This type of credit card is good for people who don’t have a credit score. To help build a first-time credit score for beginners, some banks and private credit card issuers have introduced secured credit cards. These cards work more like prepaid cards. The secured credit card issuer will ask you to deposit a security amount equal to the credit limit they provide. This security deposit reduces the risk on their end and is returned to you when you close the account or upgrade your credit card from secured to an unsecured account.
Get a co-signer
If the lack of credit history is stopping you from taking a loan, you can apply for a loan with a co-signer. This way, you can get an unsecured credit card or a loan. Choose your co-signer wisely because in case if you fail to pay the amount, your loan will become a liability of the co-signer and they will have to pay the loan amount. You should also inform your co-signer about the same to avoid any trouble in the future. If you successfully complete the loan tenure by paying the installments on time, you can start building your credit score.
Building a credit score from scratch requires time and patience. It can easily take 6 months. Practicing good money management habits will increase your chances of becoming a creditworthy applicant. Once after establishing a credit history by using these methods, you can ask for a free credit report once a year. Check these reports for errors and keep working on improving your credit score.
Staff Writer; Jay Baker
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