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6 ways to deal with limited or no credit

Coping with limited or no credit
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Coping with limited or no credit

Limited or no credit? You're in good company.

One in four adults has either no credit history or not enough active credit to generate a FICO score, according to 2004 estimates from FICO, the company that pioneered credit scoring.

Many times, consumers with no credit history are new to the world of credit. They can find themselves in a Catch-22 scenario, says Jennifer Tescher, president and CEO of the Center for Financial Services Innovation.

"You need to have a credit history to get credit," she says. "And you need to have credit to build (a) credit history."

A "thin file" means you don't have much of a track record with credit. Either you have only a few accounts, or your credit is relatively new, or both, says Maxine Sweet, vice president of public education for credit bureau Experian.

While "thin file" consumers have passed the initial hurdle, they could still "have a much harder time" qualifying for certain credit products, such as credit cards or "instant" in-store accounts, as opposed to mortgages or community bank loans, says Tescher.

If you fall into either category, here are six strategies you can try to establish, re-establish or beef up your credit file.


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