Maybe you buy everything with cash. Or possibly have recently divorced or have never taken out a loan. You are not in debt and should be happy about it. The only problem with that is you may not have any credit history. This can be a problem when you are ready to buy a home. For such a hefty purchase, the mortgage lender will want to see that you can pay your bills AND manage credit.
There are ways to gain credit even if you don't have credit cards or loans. This is called non-traditional credit.
Here are a few examples of how to gain that.
-Keep copies of bills you pay, including your rent, telephone, electricity , cable, gas and insurance.
-Keep copies of the canceled checks used to pay your bills
-Ask your landlord , and all other major bills (gas, telephone etc) to write a letter of recommendation. In the letter they should describe how long you have been a customer and how you have paid your bills every month.
-Show your bills, payments and letters to lenders to prove that you pay your bills on time every month . A record that shows 2 years of regular payments is ideal .
-Consider one credit card. A good way to start a credit card is through your bank with a "secured" credit card. This is backed by your savings account to help you establish your credit without having you spending frivolously . Make sure to use it a couple times a month a pay it off right away.
-If you are married make sure some credit accounts are in both of your names.
-Ask a nonprofit credit counseling agency for help in preparing non traditional credit history.
By following these tips you should be able to gain good credit without ever really needing a major credit card.
