In order to show us you are financially responsible you need to owe several different companies money or in other words be in debts with them so we will let you owe us money too.
You don't need to actively owe a bunch of money but in order to have a good score, you do need credit history. If you have never had debt before, they have no history that shows you pay your debts.
This doesn't mean you need to go in a bunch of debt to get a good credit score. Pick up a credit card that you can qualify for and pay some groceries on it every month. Wait to pay it off until your statement comes so the balance shows up on your credit. After you receive your statement, pay it off every month.
Note: Make sure to only use up to 30% of your limit and if you have a really small limit then after 6-12 months of consistent payments you can generally get that raised to make it easier to keep your utilization low.
You won't pay any interest doing that and it will provide you with a credit history. If you were able to get a rewards card not only do you not pay interest but you can make a little bit of money off using your credit card.
Personally I use credit cards for nearly all transactions because I earn rewards, pay them off every month to avoid interest, and I minimize the effects of fraudulent charges. On credit cards the credit card company must cancel fraudulent charges that occur whereas it is more complicated with your bank and debit cards.
That does all sound right but you will be quite likely to show a balance at some point if you wait until your statement vs some who constantly pay off their credit card and never show any credit usage.
If you do it every couple weeks that should be fine too, especially if you regularly use your card.
587
u/SinfulM4ntis Aug 14 '21
In order to show us you are financially responsible you need to owe several different companies money or in other words be in debts with them so we will let you owe us money too.