Although it’s difficult to imagine any consumer in the 21st-century digital world being invisible, an Experian/Wyman study estimates that there are up to 28 million “credit invisibles” in the United States. 21 million more people are deemed “credit unscorable” despite having some credit history. ”.
Consumers who have never used a credit card, had a car loan, or paid a mortgage are labeled as “credit invisible” by the three credit reporting bureaus, Equifax, Transunion, and Experian.
Those who have used credit in any capacity—such as a credit card or small loan—but whose credit history is insufficient to generate a credit score are referred to as “credit unscorable.”
To reach the next level of financial freedom, consumers who don’t have a credit history or score must learn how to establish credit. This covers bigger things like not needing to pay a big security deposit for an apartment or utility, as well as smaller ones like being able to obtain loans to purchase a home or car.
While it is possible to obtain credit cards without a credit history and to establish credit quickly, it is more crucial to establish credit responsibly in order to lay the groundwork for a sound financial future.
Become an Authorized User
Obtaining approval for loans or credit cards can be challenging if you don’t have experience managing credit accounts. One method of establishing credit without applying for a credit card of your own is to become an authorized user on a friend’s or family member’s credit card. As an authorized user, you will receive your own card that you can use to make purchases and will be added to the primary cardholder’s account (as long as the account owner agrees) Your credit report will include information about the credit card account and its payment history, which will assist you in building a credit history and score.
Make sure the lender reports authorized-user accounts to the credit bureaus before asking a friend or family member to add you as an authorized user. You might not get very far with this strategy if payments aren’t reported.
Additionally, exercise caution when choosing whose credit history to rely on. Only on accounts where the primary cardholder maintains a low balance and has a stellar payment history should you be added as an authorized user.
Try a Credit-Building Debit Card
The digital checking account offered by Experian Smart MoneyTM Since your payment history is the primary determinant of your FICO® ScoreTM, Experian Boost may be able to improve your credit.
The Experian Smart Money Digital Checking Account offers advantages beyond helping you establish credit. For instance, when you sign up for direct deposit, you could receive your paychecks up to two days early, pay no monthly fees1, and have access to more than 55,000 fee-free ATMs worldwide**.
Through a free or paid Experian membership, you can obtain an Experian Smart Money Digital Checking Account. Additionally, you can access your Experian credit report and FICO® Score to help you monitor your progress as you improve your credit. See terms at experian. com/legal.
Apply for a Secured Credit Card
Getting a secured credit card of your own is a great way to establish credit. Because a secured card requires an upfront deposit to “secure” your credit line, it is usually easier to qualify for than an unsecured card.
Depending on the credit card, there are different requirements for the deposit. Although credit limits vary as well, they frequently match the amount of the deposit. Certain secured credit cards might impose an annual fee in addition to other costs. Look around to find the credit card that best suits your needs if you’re thinking about getting a secured one. You can find suitable secured cards with Experian’s assistance.
You might be able to upgrade to an unsecured card and receive your deposit back once you build up a solid payment history on the secured card.
Apply for a Store Card
Generally speaking, store credit cards are easier to qualify for than other types of conventional unsecured credit cards. If you regularly shop at a particular store, getting the store card could help you accrue credit while you do the shopping you were going to do anyhow.
Store cards typically have higher interest rates than other cards, so that’s something to be mindful of. The best course of action if you want to open a store card in order to establish credit is to pay off the whole amount each month. This way, you can avoid high finance charges.
Have Rental Payments Reported
Rent payments made on schedule each month may also contribute to the development of your credit. Rental payments are normally excluded from your credit report, just like utility payments are. However, you could request that your property manager or landlord record your timely payments. With Experian Boost, you could also receive credit for your rental payments.
Establish Credit With Experian Go™
Customers who do not have a credit report can sign up for the free Experian Go program. In order to start your journey toward credit visibility, it enables you to register for a membership account and generate an Experian credit report.
Building Credit Takes Time
Building credit from scratch usually doesnt happen overnight. It might take several months after establishing your first credit account for there to be sufficient payment history recorded to produce a credit score. For this reason, it’s a good idea to begin improving your credit before you really need it.
When you are repairing your credit, keep in mind that progress takes time. Maintaining low account balances and making regular, on-time monthly payments will get you closer to obtaining the credit you need to reach your financial objectives.
You can establish credit without taking on debt with the Experian Smart MoneyTM Digital Checking Account and Debit Card, which also has no monthly fees.
Banking services provided by Community Federal Savings Bank, Member FDIC. Experian is not a bank. Experian Boost® results will vary. See disclosures.
Banking services provided by Community Federal Savings Bank, Member FDIC. Experian is not a bank. Experian Boost® results will vary. See disclosures.
FAQ
How can I start building credit with no history?
There are several ways to begin establishing credit if you don’t have any or very little credit history: you can apply for a store or secured card, establish an authorized user account, and use other credit-building services.
Can you get a credit report with no credit history?
Even if you don’t have any credit accounts, Experian Go will generate a free Experian credit report for you. Additionally, you’ll receive advice on how to establish your credit profile by opening new accounts and initiating your credit history. Add more payment history to your credit report.
Can I get a credit card with no credit history?
It’s possible to get a credit card with no credit. To start and grow your credit, you might think about applying for a secured credit card, a student credit card, or a retail store credit card.
Read More :
https://www.experian.com/blogs/ask-experian/how-to-build-credit-with-no-credit-history/
https://www.incharge.org/debt-relief/credit-counseling/bad-credit/how-to-establish-credit-when-you-have-no-credit-history/