Building a good credit history is important. If you have no
reported credit history, it may take time to establish your
first credit account. This problem affects young people just
beginning careers as well as older people who have never used
credit. It also affects divorced or widowed women who shared
credit accounts that were reported only in the husband's name.
If you do not know what is in your credit file, check with your
local credit bureaus. Most cities have two or three credit
bureaus, which are listed under "Credit" or "Credit Reporting
Agencies" in the Yellow Pages. For a small fee, they will tell
you what information is in your file and may give you a copy of
your credit report.
If you have had credit before under a different name or in a
different location and it is not reported in your file, ask the
credit bureau to include it. If you shared accounts with a
former spouse, ask the credit bureau to list these accounts
under your name as well. Although credit bureaus are not
required to add new accounts to your file, many will do so for a
small fee. Finally, if you presently share in the use of a
credit account with your spouse, ask the creditor to report it
under both names.
Creditors are not required to report any account history
information to credit bureaus. If a creditor does report on an
account, however, and if both spouses are permitted to use the
account or are contractually liable for its repayment, under the
Equal Credit Opportunity Act you can require the creditor to
report the information under both names. When contacting your
creditor or credit bureau, do so in writing and include relevant
information, such as account numbers, to help speed the process.
As with all important business communications, keep a copy of
what you send.
If you do not have a credit history, you should begin to build
one. If you have a steady income and have lived in the same area
for at least a year, try applying for credit with a local
business, such as a department store. Or you might borrow a
small amount from your credit union or the bank where you have
checking and savings accounts.
A local bank or department store may approve your credit
application even if you do not meet the standards of larger
creditors. Before you apply for credit, ask whether the creditor
reports credit history information to credit bureaus serving
your area. Most creditors do, but some do not. If possible, you
should try to get credit that will be reported. This builds your
credit history.
If you are rejected for credit, find out why. There may be
reasons other than lack of credit history. Your income may not
meet the creditor's minimum requirement or you may not have
worked at your current job long enough. Time may resolve such
problems. You could wait for a salary increase and then reapply,
or simply apply to a different creditor. However, it's best to
wait at least 6 months before making each new application.
Credit bureaus record each inquiry about you. Some creditors may
deny your application, if they think you are trying to open too
many new accounts too quickly.
If you still cannot get credit, you may wish to ask a person
with an established credit history to act as your co-signer.
Because a co-signer promises to pay if you don't, this can
substantially improve your chances of getting credit. Once you
have repaid the debt, try again to get credit on your own.
