Are you a Credit Ghost?

Today, I spoke with a customer about being a credit ghost, or no credit.    Here is an quote from this article about what this means.

A credit ghost is someone who has no credit. It should not be confused with a low credit score or “bad” credit. A credit ghost like myself, has no credit. If you look at my credit score it is “–” as in ‘not a number’.

Banks and other lenders see no credit as risky as having bad credit.  Why?   It’s because they have no way of knowing the risk involved in lending you money.  You do not have a track record so there is no way for them to determine if you will pay back what you borrow.   For first time home buyers, this can especially be harsh because many of them have not had enough time to build up their credit.

What can do you do about it?  Let’s refer back to the article.

  1. Get a credit card – do your research get something inexpensive (free) with a low line of credit. Then, charge one small purchase each month (such as fuel) and repay it every month in full. (1)
    1. 1(a). When you’ve been with your card provider for a while, ask to upgrade – get a  better card, a better rate, or a credit line increase. The amount of credit you have with one lender will impact other potential lenders in a positive way!
  2. Pay to have your rent history reported on a one time retroactive basis or on a per-month future basis. This general reports the previous 2 years of history.(2)
  3. Get signed up as an authorized user for a separate responsible credit card user.
  4. Pay your mortgage(3)