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.
