No credit history: Introduction
Like it or not, our lives are ruled by our ability to get credit (and hopefully use credit wisely). We need credit to buy a house or lease a property, buy or lease a car, have a credit card, get a line of credit and in many cases, get a job. Yes, ladies and gentlemen, many companies check your credit score before offering you a job. There are even online dating sites who match you according to your credit score. And, as we move towards becoming a cashless society, our ability to get access to credit will become even more important. So, having no credit history can hurt you in many ways.
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No credit history: Unless you use credit you may not get credit
It’s a Catch 22, isn’t it? In order to set up even a limited credit history and get a credit score you have to use credit. Your credit worthiness is established by your ability to repay. If you pay for most things with cash or by cheque, you aren’t demonstrating your ability to repay. Therefore, if you apply for any type of loan and a credit check is done to decide credit worthiness, you won’t score well if you haven’t been using and repaying credit. Believe it or not, this may put you in the same boat as someone with a poor credit history or even a delinquent credit history.
No credit history: What is your credit score used for?
Your credit score is used to figure many things including:
- Whether to extend credit
- How much credit to approve
- Whether to increase or decrease a customer’s credit limit
- Determine the interest rate charged on a loan
There are now two ways you can get your credit score online free. One site is Credit Karma Canada and the other Borrowell.
No credit history: The moral of the story is the best time to use credit is when you don’t need it
Many retirees think they don’t need credit anymore so they tend to pay by cash and cheque instead of credit. Then a situation arises where they need credit and they don’t have a credit history to show their credit worthiness. It’s never too late to set up a credit history. The easiest way is to have a credit card and use it (wisely). Even a secured credit card will work.
No credit history: Use credit wisely!
Using a credit card and paying off the monthly balance in full is not the same as accumulating credit card debt that you can’t afford. Using credit cards wisely can be convenient and beneficial. Credit card debt can ruin you financially.
If you’re dealing with credit card debt, or any debt that you can’t afford, you can count on The Ira Smith Team to set you on a path to a healthy financial future Starting Over, Starting Now. With our cumulative 50+ years of experience dealing with diverse issues and complex files, we deliver the highest quality of professional service. Contact us today.
