There are over forty million American citizens who are credit invisible. As unbelievable as it sounds, it’s true; millions of people across the country do not have any credit history and as well all know no history, no credit score. However, so many don’t realize your credit score is what makes you because if you don’t have any credit you aren’t able to take out a loan or even get a credit card.
As scary as it sounds this is happening right now and it’s truly frightening because it can happen to anyone. The saddest part is so many don’t know how to establish credit and don’t receive any help in correcting this matter.
Why Is A Credit Score Crucial?
It is hard to get anywhere in life but it’s even tougher when lenders can’t find your credit score. How can you be eligible for a mortgage when a mortgage lender can’t see your credit history? Exactly, they can’t trust you because they don’t know how responsible you are with finances. What is more, it won’t be just a mortgage you get turned away from either; it can be anything from a store card to car loans. Worst still, it will cause a huge impact.
Who Will Be Credit Invisible
Typically it is those earning fewest that are considered to be most credit invisible. This is because they do not earn tens of thousands while others are only able to work casually. Low earners really have a problem establishing credit and quite frequently become invisible in the credit world.
However, there is no set type for invisibility because anyone can fall into this category. For instance, there are those who earn a fair amount but haven’t established credit. Some are paid in cash and don’t use bank accounts and don’t use credit cards either and don’t receive any help from the government and don’t take out loans. They have credit records but they cannot be scored because there is a lack of information or history. Young people are most likely to be credit invisible simply because they have yet to establish credit.
There are quite a few simple ways to help establish credit and one option would be to use a secured credit card. Now, this isn’t always a great option however when you are trying to build credit it does offer you a great foothold in a sense. However, if this is something you are going to try you need to be assured by the card company the payment history will be reported so that you can build some payment history and credit.
You could of course be put on a friends or family member’s credit card. This would certainly help to establish credit and give you a right shot in the arm too since you make progress. It might seem a little slow but every little helps.
However if you don’t have the option to be put on another credit card you could apply for a student loan. Now, this only applies to students going to college but usually this is one way to help build some form of credit. Or, you could turn to a credit union and taking out a credit builder loan.
This type of loan is unique but really helps to build up a credit score. This is a bit tricky but as long as all payments are made on time there shouldn’t be many issues to deal with. You need to be wary however that building credit does take time and while you can find a few ways to help, it won’t be an overnight success.