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Building Your Credit Profile

In the wonderful world of lending it can be incredibly difficult to start building up your personal credit profile. Not having any credit history is a common problem in today’s society and it can lead to you being incredibly frustrated when trying to borrow money.

If you have no credit history then how do lenders know if you are a reliable person to lend money to? The simple answer is that they don’t, but if you know what the lenders are looking for then using a few simple techniques you can improve your chances of being approved.

To improve your chances of being approved for funds you simply have to show the lenders that they can trust you, and how can you do that? You can do it by showing that you can borrow money and pay it back without any problems.

When building your credit profile from nothing you need to start small and opening a bank or savings account can give you a much needed credit boost. Once you’ve opened your account simply add money in on a regular basis, this shows lenders that you have some financial history.

Another way that you can build your credit profile slowly is by using a specialised credit card. Credit builder credit cards are designed to help people build up their credit profile, they start with a low credit limit that is very easy to manage although the interest may be quite high.

To get the most advantage out of the card, use it to make small purchases and make sure you pay them off before you accrue any interest. This will show lenders that you can borrow money and pay it back showing that you can be trusted and that you’re reliable.

Another great way to show that you are reliable is to take out a store card from your favourite clothes or supermarket store. Store cards are generally easy to be approved for but don’t use this as an excuse to go spending lots of money, use the card cleverly to spend small amounts of money that you can pay off before the month ends, it will give you a great boost and you won’t accrue any interest.

If you’re really struggling to get approved for credit, you could consider piggybacking someone else’s good credit which would give yours a boost. To do this you could ask a family member if they would be happy to add you as a joint account holder to their credit card account.

The way this works is that any history on the credit card will help your credit profile which in turn gives you an instant boost. If you do decide to piggybank someone else’s good credit then remember that as well as inheriting the good you also get the bad, so if the person has missed payments in the past, this will show on your record too.

Building your credit profile from scratch isn’t an overnight process, it takes time but it’s like a domino effect, once you have something to work with then you build it up step by step.

To see if your personal credit profile is progressing as well as you would like it to, for a small fee you can ask for a credit report from a credit reference agency such as Experian, they will send a detailed report which will cover every aspect of your personal credit rating.

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