Friday, November 19, 2010

How come no credit or ghost credit is worse than bad credit in obtaining a loan?

I've been trying to get a signature loan. Because I have no one to co-sign and I have no collateral. I do not own a home. All my debts is summed up into utility bills and rent. I paid cash for my 1998 dodge Ram. I've been paying cash for everything for the last ten years. Know that I have ran out of cash. I need 10,000 dollars to restate myself to society. I've had as much as 160,000 dollars in my credit union. since 1998 but know it's gone. Yet they won't even give me a loan. (whats with that) My debt is Utility bills and 300 dollars in rent. I make a good monthly income. Again (What The ?) I need the money now, no time to get in debt, before i can get into debt. How can people get into debt, I'm trying to and can't. Their must be some kind of professional classes for this. I know they have plenty of establishment to get you out of debt. Nothing to help people establish credit. Not when a person needs the help quickly.How come no credit or ghost credit is worse than bad credit in obtaining a loan?
To answer your question why no credit or ';ghost'; credit is worse than bad credit is because at one point credit when it's establish has the potential to be good and then goes bad from either not paying on time, identity theft, and a host of other reasons. When you've never established credit to begin with, lenders have no idea whatsoever what kind of risk you are. You may have paid all your bills on time, and paid for everything in cash, there wasn't a way to report that until now. I have a solution for you that should help you out. Before now, you could never build credit by paying rent, utilities and other regular monthly payments that may not show on regular credit reports. But PRBC, a credit bureau that allows you to report these payments to build credit. It's the first credit bureau to allow reporting of rent, cable, utilities, cellular, insurance, day care, etc. as ';alternative credit'; in order to help people establish credit. I've posted a link to their website that explains it in more detail than I ever could and I believe that this may actually help you out in the long run. If you pay rent and utilities like you said you have, you can have 3 years of it reported as long as you have proof of payment and pay a fee to have it verified.

Another thing to establish credit is to ask a close friend or family member with excellent credit to add you as an authorized user on some of their oldest credit cards that are in excellent standing. The activity from the account will relfect on your report once you're added.

You can also apply for a secured credit card. How it works is you put a deposit upfront that's usually linked to a savings account to get the same amount of the deposit in a line of credit. For example you put a deposit of $300, you get a $300 credit line. You'll still have to pay for whatever you charge when the statement comes in, but as long as you keep the balance low, paying slightly more than the minimum payment a month shouldn't be a problem. Also it helps if you add to the deposit to increase your credit line. Keep in mind that you'll get the deposit back, as long as you maintain the account in excellent standing. Usually, it takes about a year for it (the account) to convert to a regular one and you're able to get your deposit back. The higher the limit once it converts, the better because it will show that you're responsible with higher limits and you may get bigger line increases earlier and more often.

I hope some of the information helps out.

Good luck!

P.S. Don't forget to check out the PRBC website!How come no credit or ghost credit is worse than bad credit in obtaining a loan?
You have no credit history to go off of. Financial Companies need to see payment history, try getting a small credit card, or a small loan to build up ypur credit. Even a secured credit card will do this.
You are going to need get a credit account opened and then build a few months of repayment history. Best thing to do is go get a cell phone, they will open an account for ET so I am sure they would open one for you. Next apply for a Capital One Credit Card, keep a samll balance at all times. The worst thing you can do besides having no credit is to have credit with a 0 balance all the time.

By the way, you need to figure out an alternate plan to get by. Personal loans are one of the most difficult forms of credit to be approved for. You may have had a million dollars at one time, but you werent making enough income to get by or else the money would not be gone. All credit is meant to help you get in debt, but you have to have a established repayment history before they put that little plastic card in your hand.
I had a similar problem just like you, but I found out that I needed to build up credit so later on I can get things. So I went an applied for a credit card at citi, you will get one just to let u know. What you do is buy something an as they send u the statements monthly you pay what you owe, like me I only have to pay 20 dollars a month, just dont go over your spending limit an in abt six months you would have established credit. Also getting cell phone plan helps you establish credit. An when u buy something say for 100 dollars dont send them 100 dollars send them the minimun of what they as, an if if u wanna send a little more thats fine. You will be able to get perosnal loeans after they see that your a good customer an pay on time
Sorry about your situation. It's going to be really hard for you to get a loan with no credit history because they have nothing to judge you by. Try getting a secured loan for the value of your truck; sounds like that should be between $5000 and $10000 if it's in good shape.
No credit is the worst credit because you are not on any records. Credit companies want to know who you are and what you do with your money . Credit companies need to know that you are dependable have a good job history and that you pay your bills on time every time . Plus they want to know where you got your money . That's why when you try to pay cash for a car or truck they look at you funny . Most auto companies want a check or money orders . I know this won't help you but asap get a loan from a loan company a small one then work up as you pay it off . Its a start . Good luck.
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