How does a person with no credit history establish a credit record?
The best way to establish credit is to start small and slowly, perhaps with a local retailer or by making a large down payment and paying the balance on credit. Many local department stores have special budget accounts – with set limits – for those with no credit history or with limited means. Once you’ve proven yourself with these merchants, you’ll have started a record. And others will then be more likely to open accounts for you. Everyone should have at least a few credit accounts. Otherwise, if you pay cash for everything, you won’t have established a record of good paying habits. And, should you ever really need credit to buy a house or need a loan to pay hospital bills, you might have trouble getting it simply because you have no credit history.
