With a credit history, it may be difficult to access bigger funding

It is great to make it into your 20s or even early 30s without accruing debt, but that also means that you probably do not have any credit history either. Believe it or not, having no credit history at all can be worse than having a bad credit. Without a positive credit history, it is nearly impossible to buy a car, rent an apartment, or eventually buy a house. Many of the things in life that most upwardly mobile people want will be out of your reach if you do not establish a good credit history.

Secured Credit Cards: Almost anyone can obtain a secured credit card. As long as you have a reasonable amount of income and you pay the required deposit, you can find a company that will gladly issue you a secured credit card. The downside of secured credit cards is that they often charger high interest rates and extra fees, but they do help you build a positive credit history.

Read also: Wants to get more loan, ensure good credit history

Get a Personal Loan: Personal loans are a great way to build credit. The best way to get a personal loan from any lender is find a co-signer with a good credit history. Having a co-signer is like giving the bank collateral to secure the loan, so the bank will be much more willing to give you a chance. Do not borrow more than you can afford to pay back on a monthly basis, and above all, do not make any late payments. Getting a personal loan only helps you if you make regular monthly payments on time without fail. Late or missed payments will not only harm your credit rating, but your co-signer’s as well.

Pay Your Bills: It goes without saying that you cannot establish credit worthiness if you do not pay your bills on time. Even though places like utility companies and doctor’s offices do not report to the credit bureaus, they will if you fall behind and go into collections. Medical bills count too. It is counterproductive to try to establish a good credit rating if you have negative collection items showing up on your report. If for some reason, you do end up with something in collections, contact the agency right away and try to make payment arrangements. If you show you are making regular payments on your debt than it will have less of an impact on your credit score.

Finally, Debt is not always a bad thing. If you manage debt correctly, it can actually be an asset. One of the key things credit card companies look at is credit to debt ratio. It is good to have a few healthy lines of credit, but make sure that you do not let your balances run too high, especially when you are just starting to establish your credit history.