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How to Become Scoreable and Build Your Credit History

Are you struggling to qualify for new credit cards or loans due to a lack of credit history? If so, you’re not alone. Many people find themselves in a similar situation, but the good news is that there are several ways to establish your credit and become scoreable again. In this article, we’ll explore what it means to be unscoreable, provide five effective ways to become scoreable, and offer tips on how to use credit responsibly. For any mortgage service needs, don’t hesitate to call O1ne Mortgage at 213-732-3074.

What Does It Mean to be Unscoreable?

Even if you’ve been paying monthly bills on time or borrowed money in the past, you might not be scoreable if you don’t meet a credit scoring model’s minimum scoring requirements. These requirements vary slightly between FICO and VantageScore® credit scores.

For FICO’s credit scoring models, you need to have both of the following:

• A credit account in your credit report that’s at least six months old
• Credit activity on a credit account during the previous six months

VantageScore’s credit scoring models are less stringent. You could be scoreable if you have an account with activity, even if the account has only been active for one month.

5 Ways to Become Scoreable

You can become scoreable by adding new information to one of your credit reports. Here are five simple and low-cost options:

1. Open a Secured Credit Card

Secured credit cards are designed for people who are new to credit or rebuilding their credit. They work like regular credit cards but require a refundable security deposit that determines your card’s credit limit. Some secured cards have high fees and interest rates, but the best ones don’t charge an annual fee and offer various rewards and benefits. Use the card for small purchases and pay the bill in full each month to build credit without paying interest.

2. Take Out a Credit-Builder Loan

A credit-builder loan is a secured loan that helps you establish or build your credit. The funds are placed in a locked savings account, and you gain access to them as you make payments or once the loan is paid off. The lender reports the account and your payments to the credit bureaus. Compare options from credit unions, community banks, and online credit-building apps to find the best fit for you.

3. Become an Authorized User on Someone Else’s Credit Card

If someone adds you as an authorized user on their credit card, the entire account history might be reported to the credit bureaus under your name. This doesn’t require a credit history or credit check. The primary cardholder retains control over the account and responsibility for the payments. You don’t need to use the card to benefit from this arrangement.

4. Get a Cosigner on a Loan

If you need a loan but aren’t scoreable, you might qualify by adding a creditworthy cosigner. Both cosigners are equally responsible for the debt, so it’s best to cosign with someone you trust completely.

5. Sign Up for Experian Go™

Experian Go helps you establish your Experian credit report and provides recommendations for improving your credit. Use features like Experian Boost® to add eligible rent, utility, phone, and select streaming service payments to your credit history. This can help improve your scores and establish your credit with other bureaus.

How to Use Credit Responsibly

Becoming scoreable is just the first step. To achieve an excellent credit score, follow these tips:

• Pay all your bills on time: Your payment history is a crucial scoring factor. On-time payments help your scores, while missed payments can significantly hurt them.
• Don’t use a large portion of your credit limit: A lower credit utilization ratio is best. Use a credit card for small payments and pay the bill in full to build credit.
• Limit how often you apply for new accounts: New credit applications can lead to hard inquiries, which might slightly hurt your scores. Only apply for new accounts when necessary.

By following these tips, you’re well on your way to building good credit.

Track Your Progress for Free

Credit scoring models consider the age of your accounts when calculating your credit scores, so it can take time to build good credit. Monitor your progress with Experian’s free credit monitoring feature. You’ll receive a monthly FICO® Score, real-time alerts for important changes in your credit file, and insights on what’s affecting your score the most.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team of experts is here to help you navigate the complexities of the mortgage process and find the best solutions for your needs.

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