As perplexing as it may sound, the financial world operates under the core principle that you must have credit to obtain credit.
Today, getting a loan is not as difficult as it used to be; you can get an instant loan online in minutes from any online loan app, but the first and foremost thing they will look at is your credit score, and if you don’t have one, then it is going to be a little challenging for you. Why shouldn’t they? After all, it determines the creditworthiness of the borrower.
Having a credit score is a must if you are looking for a loan or a credit card. Then how do you proceed forward? What can you do to build credit? Should I take up some instant loans online?
However, everyone starts with a clean slate when developing a credit score, so don’t be discouraged. There are numerous ways to build credit when you are a newbie.
Secured Credit Card
Without a credit history, there is a significant chance that lenders won’t offer you the unsecured credit card of your choice, which is simple to apply for without any collateral or security. When it comes to building a credit score, a secured card is an excellent choice. A secured credit card is issued in exchange for a fixed deposit. Many lenders are known for offering these cards in exchange for a fixed deposit of a certain amount.
Use your credit card regularly
Since it takes time to build a good credit history, using credit cards promptly and making timely payments will help you build one. To keep your credit card active, use it at least once a month at shopping stores, restaurants, or other establishments. This advice is helpful for those who already have a credit history and those who want to start one.
Make yourself an authorized user
Another option for establishing credit without applying for your own is to become an authorised user on a credit card belonging to a friend or family member. As an authorized user, you will be added to the primary cardholder’s account and pay with your card for purchases (as long as the account owner agrees). The credit card account and its payment history will appear on your credit report, assisting you in developing a credit history and score. That will help you conveniently get a loan through the online loan apps.
Take up a Flexi loan or buy through EMI
It is an excellent option to take up a short-term personal loan to build your credit slowly. You can also purchase goods such as a mobile phone, television, or laptop on EMI. Most FMCG products, including household electronics, are available at reduced prices or through EMI plans. You can set up an EMI plan for 6 to 18 months. The successful repayment of the personal loan or purchase will build a clean repayment history and thus a good credit score. You can get quick loans easily with an online loan app.
These tips help you build a good credit score and prove your creditworthiness to your preferred quick loan app when you need a loan.