by Joseph Kenny | 11/6/08

It can be difficult to start off a credit score. When you have no credit, that's sometimes worse than having bad credit! Of course, nothing beats bankruptcy in terms of credit terror, but an empty credit file is definitely not good when it comes to your chances at obtaining loans or anything else that depends on this measure of your financial reputation.

Lenders are often very hesitant to deal with somebody with no information on their credit history. They simply don't want to risk their assets on someone who they can't accurately evaluate. Often enough, a person with no credit history is young and inexperienced. However, some older individuals lack credit as well, which comes off as being very peculiar to financial institutions. In either case, the most you can hope for often enough is something along the lines of advice and a loan refusal. When this happens, it can cause significant distraught. You may feel as if you have no options, and that the system is a catch-22.

You can obtain the credit you need in order to get started on your own, financially speaking. There are several ways to go about this, but the quickest most likely is borrowing another's credit. This method is also called "piggybacking". Basically, the idea is that you borrow another person's credit record by either sharing their credit card under a joint account or getting a co-signer for a loan.

This method of obtaining credit is excellent for the fact that it allows you to qualify for loans that you'd otherwise be hard-pressed to obtain. The loans made available to you this way will show up on your credit, and if you handle them in a prudent manner, they'll significantly boost your credit scores. Also, if the person's credit card account you're sharing has an excellent credit history, it'll reflect on yours as well, giving you a credit record instantly.

There are drawbacks and concerns with this methodology, however. If you end up defaulting on a loan you've obtained through a co-signer, then both you and the person who helped you out will suffer from a negative mark on your credit scores. Co-signing naturally involves an element of risk, so its pretty much the case that the only people who you'll find willing to help you in this manner are very close friends and family members.

You just have to make good on their truth and faith in you. If you lose out on a personal loan, that's your problem. But failing to make payments on a loan someone else helped you get will only jeopardize the trust and respect that person has for you. Other people involved in your close circle could possibly think of you negatively because of this. It's a lot of pressure, but if you can handle it, then it's also very much a great opportunity to take advantage of.

Another potential concern is the credit of the other individual. When it comes to holding a joint credit card account, you basically exchange all the decisions the other person makes, and vice versa. This means that poor choices and mistakes on part of the other card holder will reflect on you as well. It's a dicey system, and involves a lot of trust. You just have to make certain that the other person is just as responsible and capable as you are.