Creating a Credit History and Credit Score
A credit history and credit score are useful for more than just getting loans. They also allow potential landlords to run credit checks. They make you exist in the banking system so you can more easily sign up for bank accounts. And, of course, they’re critical in getting credit cards, mortgages, car loans, student loans, and the like.
What I discovered recently was that it’s possible for a responsible spender to fly entirely under the FICO radar. When I began this blog, I was 21. I had never taken out a car or student loan or used a credit card. I had checking and savings accounts and never spent more than I had.
Yet I did not even exist in the eyes of creditors—I had no credit history and no credit score. I first noticed it when I couldn’t get approved for our apartment lease. Then it came up again when I tried to open a money market account…at this point I decided to take action.
This page links to my blog posts as I chronicle my way out of credit limbo into having my own credit score. I’m pleased to say that I do have a credit history and score now. I hope that the posts will be useful to you if you’re taking the same journey or informative if you’re trying to navigate your credit situation.
In which I first really discovered that my social security number didn’t work.
When it first truly struck me that I had a problem and needed to take some action. Until then, I’d been content not to have a credit card and hadn’t needed the credit history for anything else (except the apartment, but we worked that out). But my social security number wouldn’t register when I tried to sign up for several legitimate banking-related opportunities. It was as though I didn’t exist.
In which my non-existence was confirmed.
I decided to sign up for FreeCreditReport.com to see what was up. I assumed that if there was a problem with my social security number, they’d show it. But instead I didn’t show up at all, good or bad. I really didn’t exist.
In which I attempted to apply for a credit card from American Express.
I was probably aiming too high by going for AmEx anyway, but I decided to apply for a credit card. I figured that if I had one and used it wisely, I’d get a credit history & score. Not so much. If other systems don’t recognize me, why should they?
In which I get added as a joint account holder on Micah’s card.
Since the AmEx thing didn’t pan out, I decided to backtrack. Micah has a Chase card which he hasn’t used since the wedding. But we didn’t want to close it, since it gave him credit. So we went through an application process and got me added as a joint account holder. I had to send in a copy of my driver’s license, which was annoying, but it worked!
By getting on Micah’s card as a joint account holder, I took on the entire history of that account. That means that I got all the credit for his good credit habits. And I also would have assumed responsibility for any debt ever taken on using that card. Fortunately, we’d paid it off a while ago, so I only got the good stuff.
But being an authorized user has gone back and forth on getting you a credit history/score. FICO has done their best to weed out cases where the person is not a close relative and deny then a credit history. Don’t fall prey to those “credit repair” schemes which add you as a user on someone’s account…they’re barely legal anyway, and they probably wouldn’t work.
In which I get my very own credit card.
I decided to test my good luck and apply for a credit card on my own. It worked! Not the greatest or most exciting credit card ever, but it means that I now have a credit history. I didn’t have to jump through any fancy hoops to get this card either, just applied and voila!
If you’ve gotten your first card and are looking for a way to build credit, give this post a look.
Do you need to carry a balance to get a credit score?
A friend asked me whether or not she had to carry a balance on her card in order to get a credit history and credit score. Nope. Details in the post.
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