You may be confronted with one of life’s great contradictions: To get credit, you must have a credit history if you are trying to build credit.
We’ll show you the way to create a credit score in a minute, but let’s that is first the way the three major credit agencies, Experian, TransUnion and Equifax, view individuals who don’t utilize credit, or possibly have tried it once or twice over a couple of years.
When you yourself have no credit history – never ever used a charge card, haven’t had a motor vehicle loan, never ever paid a home loan — you might be exactly what the credit agencies relate to as “credit hidden. ” You are considered “credit unscorable” because there is just not enough information to generate a credit score if you have occasionally used some form of credit – probably a credit card, but possibly paid off a loan of some sort years ago.
Interestingly, you can find 26 million Us americans whom fall in the “invisible” or “unscorable” categories, which actually becomes an issue once they need it a motor vehicle or house and need a loan to do this. Loan providers will look for a credit history and while there is no information (or information that is limited, they treat you as if you have actually bad credit.