What happens If I Have No Credit Scores?
There are cases where consumers do not have any credit scores because they never applied for credit and have no credit. This is common for many young folks who just entered the work force or recent graduates from technical schools, junior colleges, and colleges and universities or those who lived with their family and had no credit under their names. Others never applied for credit and do not believe in credit and always do transactions using cash. If you have no credit scores, there are ways of getting credit scores quick and start establishing credit tradelines by adding credit. Having no credit scores is like having bad credit and will hurt you in getting new credit and you may have a difficult time qualifying for a mortgage loan with no credit scores.
How Can I Get Credit If I Have No Credit Scores?
You may have a hard time getting new credit if you have no credit and no credit scores. Whether it is a credit card company, automobile dealer, or mortgage company, they all will pull your credit report and review your credit history and credit scores. One way your interest rates are determined is by reviewing your credit profile. Creditors will review your payment history on your credit report and the longer you have an established on time payment history, the higher your credit scores will be and the higher your credit scores, the less risk you will be and the lower your interest rates will be. Higher credit scores and longer payment history means lower credit risk for the credit applicant and with lower risk comes lower interest rates. Credit applicants with no credit scores are like credit applicants with poor credit because there is no way of a creditor to see what their financial behavior has been in the past. The best way to establish credit when you have no credit and no credit scores is by getting several secured credit cards.
Secured Credit Cards To Establish Credit
Secured credit cards are credit cards that require you to put a deposit with the credit card company and the credit card company will issue you credit limit equivalent to the deposit you make with the secured credit card company. Secured credit card companies will charge you an annual fee just like any credit card company and will charge you interest on the credit card balance just like any unsecured credit card company. The biggest advantage of secured credit cards is that they will report your payment history to all three credit reporting agencies and with timely payment every month and longevity of your timely payment history, you are establishing credit and on time payment history which will yield credit scores for you. The longer you have a payment history, the stronger credit history you will have and the higher your credit scores will be. A late monthly payment on your secured credit card will be reported as a late payment on your credit report and your credit scores will drop. This defeats the purpose of having secured credit cards so make sure you religiously pay your monthly minimum secured credit card payments on time.
Adding Yourself As Authorized User
You can establish your credit by adding yourself as an authorized user on a family member’s credit card but there are risks associated with this strategy. If the main credit card user has their credit cards maxed out, this will hurt your credit scores because having your credit limit full will drop the debtor’s credit scores. More importantly, if the main credit card holder is ever late on their minimum monthly payments, it will be hurt the authorized credit card user because the late payment will be reported on the authorized user credit report as well.
Can I Qualify For Home Loan With No Credit Scores
Most mortgage lenders require three credit tradelines from mortgage loan applicants. A credit tradeline is a credit account that has been seasoned for at least 12 months and have been reporting to the three credit reporting agencies. There are some lenders like myself that can approve mortgage loans with no credit scores. We can take non-traditional credit tradelines in lieu of traditional credit tradelines. Non-traditional credit tradelines are creditors that do not report the payment history to the three credit reporting agencies. Verification of Rent, insurance payments, cellular phone payments, and utitlity payments are all examples of non-traditional credit tradelines. If you are a home buyer with no credit scores and no traditional credit tradelines, please contact Gustan Cho Associates at 262-716-8151 or APPLY NOW .