How to Build Your Credit When You Have None

Hello Hampton Roads,

Here's the scenario:  You want to buy a house, but you can't get a loan becuase your don't have a credit score.  You need credit to build credit but you don't have a credit card, car loan, or mortgage.  What do you do?

According to a 2015 CNBC article, about 45 million Americans don't have a credit score (26 million don't have a credit history and 19 million have limited/outdated files and are considered unscorable).  When you have a thin credit file with little or no reported credit history, there are things you can do to help you establish credit:

  1. Get added as an authorized user on a friend or family member's account who has good credit. This requires a great deal of trust for someone to add you to their account as they are allowing you to piggyback off of their good credit. 
  2. Apply for a secured card and charge small items like gas and pay it off on time every month.  Don't pay it off early as you want the payments to report.
  3. Apply for a credit builder loan.  These are small installment loans offered by some credit unions and community banks that are backed by your savings account.  You make monthly payments on time and your lender reports this to the credit agencies. 
  4. Have your rent report to the credit bureaus.  The latest FICO credit scoring model, FICO 9 already includes rental payment history in factoring your score. 

If you are considering buying and need help getting started and establishing credit, I can put you in touch with lenders who can help!

Thanks for Reading,


Serving your Hampton Roads and Virginia Beach Real Estate needs. Liz Schuyler on Google+


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