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Tuesday, May 19, 2015

How to: Get Credit When You Have None

Where are you in your financial journey?

If you're just getting started you may find that you don't have ANY credit. This may seem like a strange concept, but it is a real struggle some people face, I know we did!

I will say that prior to getting married I had NEVER looked at my credit score! NEVER! Why would I?

I was in college.
I didn't have any student loans (thank you scholarships and my parents).
I had never had ANYTHING in my name regardless of whether I was paying for it or not.

I was however working my booty off. I worked two jobs through college while taking maxed out course loads. Daddy D and I both graduated with degrees, and both were in a decent financial position upon graduating (not in the negative). We both got great jobs right out of college. We were very BLESSED.

We saved and saved and saved and saved more. We ALWAYS live (still present tense) below our means.

Soon after getting married we decided we wanted to build a house. You know, American dream and all.

We couldn't. But WHY?!

We had good jobs.
We had a 20% down payment.
We owned our land.
We had no debt.
We thought we were set!
BUT and it is a BIG BUT...we had NO CREDIT.

Apparently having no credit is just as bad as having bad credit! So how do you get credit and get it without going in to debt?

It SO pains me to say this because I despise credit cards, but you are going to need to get a credit card. This sounds easy, but it was actually very difficult for us. We couldn't even get approved for a Lowe's card! FINALLY after many calls we were offered a student version of a credit card. This allowed us to start building credit. We would put a couple of purchases on the card and when the statement came in we would immediately pay the balance off. Please ingrain this in to your MUST PAY THE BALANCE OFF EVERY MONTH. If you don't the fee's will start piling up and your balance will grow substantially without ever swiping that card. I'm not sure about you but I prefer not to just give my money away. Nor do I want collectors calling my house at all hours of the night.

Tip: Try to get a card that offers a % of cash back based on the purchases you make. Usually you can take these cash back rewards and apply them to your balance! Many times they will let you do this every month, every penny counts!

Another suggestion, make sure all of your bills are in your name. I know in the beginning we had bills in our parents names that we were paying. This is not helping your credit score.

I know when we were starting out this no credit is just as bad as bad credit thing was mind boggling for me. We hadn't done anything wrong and yet I felt like we were being punished. If we had made some small changes in the beginning the process of getting a loan to build our home may not have taken as long on the back-end.

Disclaimer: I am not a financial advisor. I am merely speaking from personal experience. Take my advice for what it's worth. It's working for us.

Much Love, Misti

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