Is Your Credit Score “Invisible”? Here’s How to Fix it
– Do you know if you're
'credit invisible?' You go to apply for a loan,
but then this happens— Hi, I have a 9:00 appointment. Hi, I have a 9:00— According to the
major credit bureaus, you have no payment
history, no credit score, so you can't get a mortgage,
credit card, auto loan, and in some cases,
secure an apartment. You are essentially invisible. So, how much do
people really know about credit invisibility? Do you know what it means
to be credit invisible? – No. – No, I don't think I do. – Having a non-alarming
credit score. – I wonder what some
superheroes think about this. Do you know what it means
to be credit invisible? – Like a ghost? Like you're not off the map.
– Like a ghost. – No. Educate me.
– Yeah, so I actually
qualify as credit invisible because I have no
real credit history 'cause I just opened up a credit card. Someone who has no
long-term credit history or no credit history at all, they would be deemed
credit invisible. – You're the first person
to have a very solid answer. This is great. Good job, Hulk. This is "Your World
on Money." Credit invisible. Roughly 28 million
American consumers have no credit history. Another 21 million people
have unscorable credit files due to a lack of
recent credit history. It's important to note that
anyone can be credit invisible, especially those who
have moved here from another country.
I would know. I'm from Canada, and I didn't
know that credit invisibility was a thing until I
moved to New York City, applied for an apartment, and was told I have
no credit history. I was very confused because
I had spent a lot of money shopping on my Canadian credit card, and of course,
also making sure I was paying it all off
on time every month.
As I continue to understand how credit can be
a financial tool, I thought it would be best
to chat with an expert to figure out what exactly it
means to be credit invisible and how you can
become visible. Hello, Bryan. Thank you so much for
being here today. – Thanks for having me. It's a pleasure to be here. – So, can you tell me what it
means to be credit invisible? – It means that you
have no credit history, no report whatsoever, so lenders can't decide whether to give you
money or not. Like, they can't help you 'cause they don't have
anything to base that off of.
It impacts every aspect
of your life: Getting an apartment or
establishing utilities, water, electricity, all of that
is impacted by your credit. – So, if you don't have
access to credit, do you just use cash
for everything? Can I do that? – You can use cash, but
you would need a lot of it, a substantial amount. So for example, if you
are looking to buy a car, if you don't have $30,000
to put towards that car, then you'll have to
finance the car, and to be able to finance
it, you'll need credit— and you'll need to have an
established credit history in order to get credit.
– At one point, I was
considered credit invisible because I didn't have
a credit card of my own and no track record. So who else is affected
by credit invisibility? – Yes, and you're
not the only one 'cause I was too at one point, and so it impacts everyone. It impacts young adults,
those who are in high school. They don't have any
type of credit— some of them aren't 18 so they can't really
take out loans or sign for loans or
anything of that nature. It impacts immigrants, those who are new
to the country. They don't have any
type of Social Security or any, like, loans or
anything in the States, so that can become a problem because there's no way to
know their use of money. And last but not least,
it impacts retirees, those who've had
credit history but start closing out
their credit card accounts or they're not using
them anymore, they're living off their
retirement savings. So at that point it's just like they're not using the credit.
So it impacts those three main groups. – All right. So I need you to give us the life hacks. How do you go from
being credit invisible to credit visible? – Yeah, there's a couple ways that you can become
credit visible. As a young adult, becoming
an authorized user is one. Having a parent or guardian that adds you onto their credit card can
make you credit visible. Taking out a store card
or getting a secured card. Let's say you're a young
adult, you have $200.
You can take that $200 and put that on a secured
card that you can use. That is now your credit
limit that gets processed to all the credit bureaus. So you can utilize that, and then paying it off
at the end of the month. That way, like,
you're establishing that you know how to
use credit wisely. – Okay, I love that. That feels like a very
feasible hack I can start doing to establish credit. – One thing I
would recommend is to go look at the credit bureaus here, the national credit bureaus, and just look and
see what tools and free resources they
have on their websites. There's a ton of tools and apps out there
that they have that can be useful to
establishing credit visibility.
– Wonderful. Thank you so much, Bryan. It was a pleasure
to talk to you. – Thank you for having
me. It was a pleasure. – I learned how vital it
is to be credit visible. If you aren't credit visible,
you can have a hard time with basic services like
renting an apartment or even renting a car. Being credit visible
helps people gain access to financial tools that can help them be
more financially healthy. It can boost your
quality of living and lessen the amount of stress you have when it comes to
being approved for applying for a mortgage for your dream home
or dream car. Hi, I have a
9:00 appointment. – Ah, yes. Come on in. – Having good credit is essentially a form of financial self-care,
becoming the backbone of a seamless day-to-day living scenario..
