Q&A: Why is my credit not building?
Question by : Why is my credit not building?
For the past 4 years I’ve been renting apartments and have had utility and cable bills under my name. Just recently I tried applying to rent a house (nothing new for me) but when they ran the credit check on me it said that I have “no credit score”.
How can this be? In the mean time I plan on openning a credit card in my name ASAP to start building my credit from scratch, but is there any chance they got it wrong? And how can I fix it? I don’t get how I can have absolutely no score at all. Do I have to open a credit card before my other bills start counting towards my credit?
Please help!
Best answer:
Answer by SPIFIMAN1
Rent, utilities, cell phones, gym memberships, checking and savings accounts are not extensions of credit and do nothing to build score.
To build a credit score you must have either credit card (revolving) accounts or car, boat, home, motorcycle, furniture (installment) accounts that you have paid over time.
People that have never established credit, have not used it in several years or have such bad credit that their score is below 300 will always default to a 0 under the FICO algorithms.
What do you think? Answer below!
renting and utilities are non reported items so you have never established credit.
Best cheapest way to establish credit is a secured bank loan pay off over 7 months and repeat until you can get an unsecured one. Getting a CC to start your file is not only stupid because even if you get one the limit will be so low you will cause more harm then good using it it is stupid because until you have practice paying debts CC offer to much freedom
Calvin, the size of a credit card line has ZERO to do with the credit score. The ONLY thing that affects the score is percentage that you have used. It doesn’t matter if you have $ 100 in total credit card lines or $ 1,000,000 in total credit card lines. If you use $ 50 of $ 100 or $ 500,000 or $ 1,000,000, it is all the same to the bureau: 50% used capacity.
***By the way, the bureau docks you 1 point for every 1% of revolving capacity you use***
And lastly, a credit card is the BEST way for you to establish credit. A secured loan will cost you 10 points for the new trade line and 5 points for the inquiry. It will take 12 points for it to start having any positive affect on your score.