No Credit History

Your credit rating, which is a numerical score based upon your credit history, can be used to identify your credit worthiness, and is designed to assist lenders in making their decision when you make an application for one of their products.

As with a poor credit history, if you have No Credit History at all this can affect your ability to obtain credit. If you have no credit history, therefore a lower credit rating, lenders will find it difficult to predict how probable it is that you will make your repayments on time.

However, as your credit rating is a numerical score based upon your credit history, it is possible to increase your credit rating. A higher credit rating can suggest a greater possibility of being accepted for credit; therefore, for those with either a poor credit history or no credit history at all, you should look to repair your credit history, or if need be, build your credit history from scratch.

Perhaps the most effective, but simplest way, to either improve or build your numerical score would be to include yourself on the Electoral Register. The electoral register is a list of all those that are eligible to vote. If you are not currently registered you may be hindering your chances of obtaining credit.

Being on the electoral roll considerably improves your credit rating by giving you more points toward your overall numerical score. To be seen that you are eligible to vote shows reliability, and additionally helps to show that you are who you say you are, and the more points, means the more likely it is that an application for credit is agreed upon.

It is also worth noting that, as well as reliability, an indication of stability is good. When you apply for credit the information on your credit report as well as the information you supply in your application for credit is taken into consideration. This differs from lender to lender and the different products on offer but generally a lender would favour;

 Homeowners over tenants
 The employed over the self-employed AND
 A land line telephone number over a mobile telephone number

Lenders also prefer an applicant who has been at their current address, with the same employer, and even with the same bank for some time, as this not only shows reliability but consistency as well.

If you have no credit history whatsoever then one of the best ways to build your credit history from scratch would be to apply for a credit card. To obtain a credit card if you have no credit history is difficult but not impossible, you just need to apply for the right credit card.

Lenders do not normally advertise their criteria so it can be difficult to know which credit card to apply for. If you apply for a credit card designed for those with a better than average credit rating, then it is more than likely you will be rejected.

Before you make an application with a credit card provider, simply inform them that you intend to apply but would first like to know more, such as if you meet their criteria. If you do not meet their criteria, then do not apply. If an application for credit is turned down it can actually affect your chances of obtaining credit elsewhere.

If your application for a credit card is accepted then by using and managing your credit card correctly you can build your credit history from scratch. For a credit card to benefit you, you would need to ensure that;

 You always stay within your credit limit
 You never miss a payment - ideally you should aim to pay off the entire balance owing each month to avoid being charged interest, if not then try to pay off as much as possible, but do make sure you pay the minimum repayment required at least.
 You make your repayments on time AND
 You only spend what you can afford to repay.

Abiding by these rules will help you build a good credit rating. Even if you have a poor credit history, then by following these same guidelines you can actually help to repair your credit rating, making it easier for you to obtain credit in the future.

If you are aware however that you have a poor credit rating, then ideally you should check your credit report first. A poor credit rating suggests that you have been awarded credit in the past but you have failed to manage your accounts correctly. Checking your credit report will give you a better understanding as to whether or not you should apply for credit in the first place, and if it would be worthwhile.

To build or even repair your credit history will take discipline and quite some time. Lenders like to see that you have been able to manage your accounts correctly over an extensive period of time, so depending on the severity of your credit rating; you should expect the process to take several months or even years.

The idea is to help develop or remedy your credit history. If you find any difficulty in abiding by any of the above you should contact your provider in the first instance. Contacting your provider if you are unable to keep up with your repayments can help to prevent you from obtaining a poor credit history; after all you do not want to replace no credit history with a bad credit history.