 TITLE: Why No Credit Is Better Than Bad Credit CONTENT: How to Build Credit When You Have None\n--------------------------------------\nObtaining a credit product, such as a loan or credit card, in your name is the swiftest way to begin a credit history. As an unknown risk, you can inspire confidence by offering collateral. Secured credit cards and credit-builder loans are ideal for people who are credit mysteries and can put down a deposit to begin establishing credit.\nWith a secured credit card, you provide a cash deposit to the issuer, then receive a credit card with a limit that typically matches your deposit. The issuer can claim the funds held in deposit if you don't pay your balance. As long as you manage the card well by using it often and paying the balance in full by the due date every month, you'll add positive data to your credit report.\nCredit-builder loans are also secured by a cash deposit. You repay the loan in regular installments, which the lender reports to the credit reporting agencies. After the loan is paid in full, you will get your deposit back and your credit report will indicate a many months' worth of timely payments.\nNot everyone can afford to put down a deposit for a secured credit card or credit-builder loan. That doesn't mean you're out of luck, though. Here are other ways to build credit:\n*   **Become an authorized user.** If you know someone who has a good credit history and will add you to their credit card as an authorized user, that account will show up on your credit report. As long as the primary account holder keeps the balance low and always pays on time, this can help jump-start your credit history. Because the account is not in your name, the primary user is responsible for all payments.\n*   **Find a cosigner.** Perhaps a person with a positive credit rating will open a credit card or loan with you. Because you would share ownership, you would be equally liable for the account. If you renege, the creditor can pursue one or both of you for payment.\n*   **Apply for an unsecured credit card.** Some credit card issuers are willing to grant credit newbies a small credit line without requiring a security deposit. If you manage it well, the issuer may increase the credit line.\n*   **Obtain a student loan.** You don't need any kind of credit history to qualify for federal student loans. If you're in college and need to borrow for tuition and other essential expenses, a student loan can be beneficial. The loan will appear on your credit report, and even when you're not in repayment, it will help your credit history and credit mix. Your credit may escalate more when you start to send payments and lower the loan balance.\n*   **Consider a nonprofit lender.** If your income is low and other alternatives don't pan out, you may be able to get financing and start your credit history by participating in a nonprofit lending circle. Organizations such as Mission Asset Fund offer low-rate loans and report your borrowing and repaying activity to the credit reporting agencies. END