What Does It Mean to Be Credit Invisible?

Experts estimate that approximately 26 million adults in the United States have no credit records. Another 19.6 million do have credit records, but they're unscored.

If you fall into either of these categories, you may be considered credit invisible.

Read on to learn more about what this means and the consequences that can result from credit invisibility. We'll also outline some steps you can take to start building your credit score.

What Does it Mean to Be Credit Invisible?

Let's start with the basics. What is "credit invisible?"

Someone who is credit invisible does not have a credit history with any of the major credit bureaus (Equifax, Experian, and TransUnion). If someone is credit invisible, they will have a very hard time getting approved for a credit card, an auto loan, or even an apartment lease or account with a utility company.  

There are lots of reasons why someone might be credit invisible. They might be an immigrant who's new to the country, for example, or they might be very young and new to the concept of credit. 

How to Build Your Credit Score

Now that you have a basic "credit invisible" definition to work with, let's dive into what you can do to improve this situation.

Having no credit score holds you back from a lot of things, including getting approved for loans. Here are some tips that will help you build your credit score:

Open a Secured Credit Card

A secured credit card is a good choice for those who are new to the idea of building credit. In fact, these cards make up about 7 percent of all credit cards issued to those under the age of 35.

To qualify for a secured credit card, you typically have to pay a deposit (around $200-$300) before you can start using it. The deposit reduces the risk for the lender. It also gives you a chance to prove that you're capable of paying back what you spend.  

Become an Authorized Credit Card User

Do you have a family member or loved one who does have a good credit score? Are they responsible when it comes to paying their bills?

If so, becoming an authorized user on the card gives you a chance to "piggyback" off of their credit. This allows the account to be listed on your credit history, but you don't have to worry about paying the bill. 

Get an Alternative Credit Score

You can also get an alternative credit score instead of relying on building credit with the traditional bureaus.

Alternative credit scores use other data, such as rental payment history, utility payment history, and employment history to assess your financial responsibility. This can reduce some of your financial stress and help you to get approved for loans and credit cards more easily. 

Start Building Your Credit Today

Do you have no credit score? Are you tired of being credit invisible?

If so, give the tips outlined above a try. They'll help you start building credit so you can increase your chances of getting approved.

Want to get your alternative credit score? Register here to start taking control of your finances. 

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