Help! I Don’t Even Have a Credit Score

February 15, 2012 by  Filed under: Credit 

Personal finance experts have been showing up in the news more often in recent years to highlight the importance of a good credit score and explain the impact a bad credit score has on your financial life. But what if you have discovered you don’t even have a credit score? It may sound impossible to be an adult and have no established credit but it does happen.

Criteria of Credit

Consumers have all kinds of factors affecting their financial life. Many live without credit cards, loans, and other financial products that are instrumental in establishing a credit history. In doing so, they may not have a foundation established at all. While this may seem like a rather good situation to be in – not needing credit and loans – it can actually have a significant impact on other areas of your life.

First, let’s look at why you may not have a credit score. Here are some factors that can affect your lack of credit history:

· You do not show any activity on open credit accounts in the previous six months

· You have not established a history of credit for a period of two or more years

· Your credit may have been used fraudulently

· You may have been mistakenly reported to the credit bureaus as deceased

· Your credit file has incomplete/inaccurate information

Any number of situations can cause problems with your credit history. Even one wrong digit in your Social Security number can create issues for your score. If you have tried to pull your credit score with the credit bureaus and reach a dead end, you will need to contact the reporting bureaus to find out what has gone wrong. They should be able to review the information they have and give you the proper procedures required for correcting inaccurate information.

Be sure to check with all three consumer agencies, Experian, Equifax, and TransUnion. While credit histories and scores may be similar between the individual agencies, the reports and data will differ in some aspects so it is wise to cover all of your bases when making corrections to your credit.

Impact of Negative Credit

If you do not pay attention to your credit score and history, don’t make the mistake in thinking that it will have no effect on your financial life. If you lack credit because you pay everything in cash, you may actually be spending more than you need to pay for basics like utilities, auto insurance, and cell phones.

The reason is because these service providers generally run credit checks before starting new services for a consumer. With no credit history or poor credit scores, the provider considers you a higher risk without proof of responsible payment history. As a result of this risk they will charge you more money than those with good credit in an effort to cover their financial risk.

You also need to establish a good credit foundation in anticipation of the future as you never know what may happen. You may need a personal loan or line of credit for needs you have later in life. By not establishing a good credit history now, you won’t have the score or history you need later.

Getting Back on Track

It will take time but you can establish or re-establish your credit starting now. You can try a few methods to get you back on track. Try securing a loan with your regular bank. You only need a small personal loan to get back on the credit radar. Make timely payments each month until it is paid off in full. You can also try to get a secured card to use while your credit builds up. A secured credit card is designed for people that lack credit or have low credit scores. Again, timely payments are essential for establishing good credit. Spend only what you can afford on in cash when you use your card so you don’t risk acquiring debts you can’t afford.

As you use your credit wisely, make sure to check in with the bureaus by ordering your reports and score. This will help monitor your credit and prevent incidents of fraudulent credit use by an unauthorized individual. By keeping tabs on your accounts, you’ll know where you stand and what you can improve to stabilize your credit history.

This guest post was written by Steve Dowell, a professional writer specializing in topics related to personal finance, debt relief, credit repair and more. Pass through for more tips and advice.

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