All you need to do is deposit a few hundred dollars into a savings account, use the card a few times, carry a small balance, and soon you'll have a FICO
score; perhaps a very good one. Ask your long distance phone carrier for a calling card and use it every once in a while. some car dealers require only a steady job and no bad credit to give you a decent auto loan with a 10% or more down payment.
This seemed to be more of a problem before FICO came along, as applicants had to convince a loan officer to give them credit when no one ever had before.
I personally started with a $100 card from Jordan Marsh (now Macys'); bought the most expensive umbrella in the
store and took six months to pay it off. After that, low limit Visa and
Mastercard "plastics" followed, which quickly became Gold
Cards.
This is the classic "catch 22"; college graduates trying to break into the job market often experience the same thing.
Secured plastic is the surest way around it, if you can afford the up-front money.
This sits in a savings account, and after a year they'll let you take it out if you've handled your credit
properly -- if you default, they'll take the money and pay the debt
you owe. Start small. With FICO, you don't need big balances, income, fancy job, or anything else.
All you need is the score, and to the best of my knowledge, only what is on your credit reports is what is
(supposed to be) used. One user having no score reported being added as an authorized user to
a relative's Amex Platinum card, and in a few months they had a middle
FICO score of 748. Plug this in with a satisfactory appraisal and you can buy a $1M house with nothing down
(though you'll get a better interest rate if you come up with 5%
deposit). Wells Fargo has programs where you don't even need a
job -- score or appraisal, and you can buy right from a homeless shelter, psychiatric ward, or prison cell
(if you're hospitalized or incarcerated, a trusted person on the outside, or a good lawyer, may sometimes have to act on your
behalf).
There are catalogue companies who sell cheap, overpriced junk at 3 or 4 times value, require a down payment equal to what the product is actually worth,
then allow you to pay the profit over time, reporting positives to the CRA's as you go.
This is not a bad idea -- you can buy something for $60, pay $20 up front and $10 a month for the next 4 months, plus their ridiculous rates of interest
(18%-25%) and some hyper-inflated shipping charges ($13 UPS Ground
for 3 pairs of pantyhose). This is how these folks stuff their pockets, but you
should get an initial credit score. If your next next junk mail
is from Chase offering a $10,000 line of Platinum "plastique" with 0% interest for a year, by all means go for it!
In many real estate marketplaces, that's the down payment for your first house or condo, interest free.
This is the best strategy I know -- one of my sisters went this way after a bankruptcy, and had
plastic cards in her wallet within 2 years. If you're starting from scratch, things should move along
much faster than that. Good Luck!
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