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With the last recession hitting many people so hard, credit became nearly impossible to get. Then some  millennials decide to live without credit since banks and other financial institutions don’t seem to want them. To the banks they don’t seem that trustworthy. These factors are part of the reason why credit invisibility has become a major issue for Americans.

In fact, the Consumer Financial Protection Bureau (CFPB) found that there are 26 million Americans who are now considered “credit invisible.” This breaks down to approximately one in every 10 adults who are now without any type of credit history. Of these, a large percentage of these credit invisible are found in low-income neighborhoods or are black or Hispanic consumers.

Why you need some credit

The problem of having no credit history is much bigger than just some type of inconvenience. It reduces the number of opportunities for these consumers. It affects if they can start businesses, buy cars or homes, get an education and get a job sometimes. Many of these missed opportunities are ways in which consumers could better the quality of their lives. Which could provide a boost to the entire economy when all people can contribute more to productivity and purchases. If starting a business is on the horizon, a credit history and financial preparation are a must.


The dilemma is often how to get credit to establish the credit history in the first place. And you will need a credit history to start a business. It can be a slow process though. But with patience and a clear action plan, those who are credit invisible can transform themselves into credit visible consumers.

Where to start if you haven’t

Here’s a few strategies to help build credit when you have none …

Open a checking account at your local bank

Lenders and creditors like to see that you have an established bank account. This can show them how you manage your money and pay other bills.

Have utilities in your name

It can be possible to have your utilities in your name without a credit history. Which can be a good way to build a credit score. These utilities can include electric, gas, telephone, water or cable.

Establish a residence and employment history

A job and residence history shows lenders your behaviors. It’s easier to determine your likelihood of responsibility with money. You can even ask that your landlord supply the credit agencies with a report of on-time rent payments.

Be selective with credit applications you fill out

If you fill out every possible credit application, this will show up with the credit reporting agencies and become a red flag.

Start with a secured credit card or loan

This type of credit card or loan product is designed for someone to establish a credit history or repair one that turned subprime due to bad choices in the past. Be careful when applying for these because you will want to avoid those secured credit cards that come with a ton of fees. A bank or credit union is a good source for a secured credit card or secured loan. They may even report your on-time payments to the three main credit reporting agencies, which will help generate your credit history and work toward a good credit score.

Become an authorized user

You may have a spouse or family member who does have good credit. If that’s the case, they can add you as an authorized user where you can use the credit and make payments that illustrate your credit worthiness. If you do this, you want to make sure that the primary card holder is also on-time with payments and is fiscally responsible.

Start checking your credit report

Howard Dvorkin says that consumers should order annual copies of each of their credit reports from annual credit report com. You are entitled to one free copy of each your three credit reports per year, so take advantage of this.”  By checking your credit reports, you will be able to see progress and track your credit score to determine what else you still need to do to gain greater visibility and ranking.

Then give it time

While there is no set timeframe that determines when your credit invisibility disappears, it will happen eventually by following these strategies. Just be patient and proceed cautiously to ensure that every step you take is prudent and helps build your credit history. If you are still not sure, there are credit building workshops and money management courses that could help you make smart decisions about how to grow your credit.

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Meet the Author

John Rampton

John Rampton


Rampton is an entrepreneur and connector who advises several companies in the Bay Area.


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