What Is Worse Than Having Bad Credit?

An Empty File

Having an empty file is not necessarily the worst situation, since bankruptcy could be even worse, but there is no information on the person's credit records and a lender who uses his common sense, will not risk lending the money solicited by a young, inexperienced person with no records. In the best of cases the lending agent will try to give some sound advice, but will more often than not, turn down the request.

There Are Exceptions, Though

The exceptions are lenders who will compensate the risk with a higher interest rate. So, considering the age of the prospective borrower, we must assume that his or her income is not necessarily important, making it very hard to keep up with payments.

There Is A Way

It does not mean cheating the system. It's just a wise use of the rules, obtaining as only benefit, a positive rating in your credit report and in a short time. Most banks will open a regular savings account to anyone over 18 years of age. If you have $400, you will be able to start sooner; otherwise just save as much as you can at a time, until you get to that amount.

Then, three days after you have reached the $400, ask the same bank for a short-term loan of $400. Any bank will give you that amount, if it is exactly what you have deposited in their bank. With your new $400, go to another bank and open a savings account and do the process all over again. Three days later ask for a loan of $400. Do the same for a third time and go home with your third loan of $400.

The Payments

After the first month, you will need to start paying the installments. Do so with the product of the last loan and as you pay the installments for the three loans, you will begin to free credit. This will enable you to obtain the necessary cash to pay for the other installments. Finally, you will have paid them all back, with a very low cost, since the fees and interest rate for such small loans are chicken-feed.

And Now, Your Credit Report

Request your credit report to any of the three credit bureaus and you will find the entries of your three loans and the prompt payments of all three, or more, if you have the patience and the time to do it in a coordinated way.

Now, The Big Bucks

Once you have your credit report with a perfect score, you can go for the big bucks. Well, there's no hurry, but I mean to say that the doors are open to a larger loan or line of credit to get you a decent beginning in life.

Even before you think of raising a family, you can start to tap into investments, financed with a loan and you will surely be better off than many others who have not cared to build themselves a good credit rating. Those, wait for the water to reach their necks and only then, start thinking about taking a loan to get by.