If you don't have any credit history, or you have bad credit, it could be quite a challenge and annoying if you try to get a credit card or take out a loan. Building up your first credit history can be a Catch-22. When you don't have credit, no one is very willing to give you credit, yet you can't ever establish credit if nobody will give you any.

If you are looking to get some credit for the very first time, lenders can't take a look at your FICO score to see if they want to lend you money. When this happens they have to evaluate other factors to help them decide if you are a credit "risk" or not.

One of the first things they look at is employment history. Lenders need to see if you can hold down a job or if you've had periods of unemployment. Your ability to keep a steady job will augment the chances of getting approved.

Lenders also look at residence history. They can look at how often you move or if you rent or own. Just the same as employment history, it is really good to have a stable residence. Owning a home, even if jointly with a partner, carries loads of weight as well.

Having utilities in your name is also good; it shows your "purchasing power" and ability to pay bills over time steadily. Without a credit history you can still pay for many utilities in your own name. An electric or gas bill, telephone, cable, or water service in your name is perfect. Having your name alone on these accounts won't give you a credit score, but it sure is helpful for first-time borrowers.

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There are a couple things you can do that could help you to establishing credit. You should open and maintain a checking and sometimes even a basic savings account at any bank. This is very beneficial to gaining credit. When you have an active bank account, you are showing the bank that you can manage money. Bank accounts by themselves are not usually part of your credit score although lenders use the information to see if you are a credit risk. Having a bank account will also establishing a relationship with your bank. When they know you, they will be more likely to give you a loan or credit card with them. You are known to them and they value your business. They also have a formative assessment of whether you can manage money, or if you are able to repay loans etc.

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If you are desperate and need credit just to get your first credit card, or you are rebuilding a ruined credit, consider a department store card.

You must have been shopping at a mall once and been asked if you wanted to apply up for their store credit card to save 20% on all your future purchases. Most of the time, store cards are a bad idea. They entice you with an immediate discount and promise of future savings, but they also have high ongoing interest rates.

Usually you should avoid these cards, but they are very easy to obtain and immediately start to earn you credit worthiness. If the local bank didn't work out, you should consider getting a local department store card. It's very important before you apply to make they report to the credit bureaus, otherwise all your credit worthiness earning will be for nothing.

Once you get a "mall card", you should be disciplined and use it with respect. Remember, this is your last chance at earning back credit worthiness. Use it only to earn credit worthiness and not as an actual credit card. Only buy with it if you know you could buy with it anyways on the spot. Then promptly pay it off so as to gain credit and have it reported to the credit bureaus. The limit will almost surely be low anyway. It is very important to keep paying the bills frequently and regularly so your credit history can be built upon it.

Repair Credit

Establishing good credit worthiness takes time. You cannot take shortcuts or use tricks to circumvent the system and get you a high score in a matter of months. It is important to get your first credit, it is even more crucial do the right things to keep that good credit.