Are you “invisible” when it comes to getting the credit you need?
According to the Consumer Financial Protection Bureau (CFPB) there are approximately 45 million people in the U.S. who can’t get the credit needed advance their lives. These people are disproportionately from minority groups and are often people living in low-income neighborhoods with few banking services—
But there is good news. Establishing and maintaining credit is possible, even if you don’t have it now.
Here are four actions those who are “credit invisible” can take now to help get the credit they need to build a better financial future:
- Report rent and utilities. A record of on-time payments made consistently over time shows you may be credit worthy.
While regular payments to your landlord and/or cell phone service don’t generally count toward establishing credit—all three of the credit bureaus (Equifax, Experian, TransUnion) will include this information in their credit report if they receive it.
To make sure credit bureaus have your rent and utility payment information, sign up for a service that reports your payments to them:
-Experian Boost captures rent payments from your checking account and adds them to your Experian file.
– RentalKarma report payments to TransUnion
– RentalReporters report payments to TransUnion and Equifax
– RentTrack and PayYourRent report payments to all three.
Note: These organizations may charge fees for their reporting services. - Apply for a secured credit card. A card secured with a cash deposit gives you an opportunity to demonstrate your ability to responsibly manage credit.
This is a good option for those establishing, building, or rebuilding their credit, and can help you qualify in the future for traditional credit cards. - Get a credit builder loan. Unlike a traditional loan where you borrow money upfront and pay it back over time, a credit builder loan lets you make fixed payments to a lender and gives you access to the loan amount at the end of its term.
This can be an effective way to demonstrate your credit worth. - Check to see if you have a VantageScore. Many people who are conventionally unscoreable are likely to have a VantageScore.
VantageScore is a credit-scoring alternative that in many cases can provide a credit score within lendable range to help open the credit market for those traditionally cut out.
You can access your free VantageScore from a variety of providers – go to the Consumer section of VantageScore.com and chose “free credit scores” for a list. Similarly, the “How to build your credit” page contains links to many of the organizations listed previously.
Things are changing in the world of credit.
More previously “invisible” individuals are able to get credit now.
Thanks to innovations made by VantageScore and other organizations, credit opportunities are opening up.
This information is for educational purposes only and does not constitute legal advice. VantageScore results may vary and not all lenders use VantageScore or may use a different version of a VantageScore credit scoring model. All third-party brand marks are the property of their respective owners and do not necessarily imply product endorsement or affiliation with VantageScore. While VantageScore attempts to verify the accuracy and availability of the listed products and services, it cannot guaranty the accuracy and availability of such products and services and all information in this article is presented without any warranty.