Posted on: Oct. 14, 2017 in Credit

You need a credit history in order to get by in today’s world. Even getting a cell phone will prompt a look at your history and, if there isn’t one, things can get tricky. The same is true for an apartment, a job, insurance, and more. Cash may be your preferred way to pay, but everyone is assumed to have credit so for better or worse, that’s the expectation.


Those in the United States with no credit history at all are known as credit invisible. They make up about 11% of the population (about 26 million people). Those who have little data or the data is too old to be useful are known as unscored. They make up about 8% of Americans, or about 19 million people.

What can you do? The answer is to get credit. But wait – don’t you need credit to get credit? Well, sort of. Here are some things that can help build up a credit history from scratch or reignite an out-of-date history.

Put things on your credit card. If you have a credit card and no longer use it, start up again. This is the easiest way to build up your credit history and keep it current. Use it for a regular bill, like your cell phone, or for purchases you know you’ll make and pay off each month like gas or groceries. You won’t build up debt or add to your budget, but the activity will show on your credit history.

Open other types of accounts. If you’ve never had a credit card or you closed them all when you paid them off, there are other options.

  • If you can, open a new card.
  • If you’re not eligible for a regular credit card, consider a secured one. You’ll pay a deposit and have a credit limit equal to that amount, maybe $200 to $500. Use it like a regular credit card and pay it off monthly to build a history. If you don’t pay it off, the issuer will keep your deposit, but this will have a negative impact on your history.
  • Ask a friend or family member to add you as an authorized user on their card. Just be sure to pick someone who pays all their bills on time. You won’t even need to use the card to reap the benefits of the main cardholder’s usage.
  • Consider a credit builder loan. With these loans, the money you borrow will be set aside and you won’t have access to it until you pay back the amount of it. It’s almost like a savings plan, but the regular payments you make will be reported to the credit bureaus, building up the history you need.

Don’t make credit mistakes. Once you’re using one or more of these methods to build up a current credit history, it’s very important that you don’t miss a payment or accumulate date. Don’t use more than 30% of the credit available to you, as this will keep your credit score down. If you can, opt for both revolving credit (credit cards) and installment credit (loans). Having a mix of credit can help raise your score as well.

If you’re ready for a new car but your credit is keeping you from getting approved, CreditYes can help with our bad credit auto loan program! We can match you with a dealership in your area that will be with you every step of the way. Our service is fast and free. Fill out our secure online application and get behind the wheel of your next car today!