Overcoming Credit Invisibility
Do the credit bureaus know you exist? If you’re looking to buy a home it’s vital that you are visible to each of the credit bureaus and have established credit scores. On this week’s episode we’re going to talk about how to overcome credit invisibility to help you buy your first home. Check out the full episode and if you have questions about how to get started with Homeowner Prep, be sure to reach out to us or drop your question in the comments.
What You’ll Learn from this Episode:
- Why People Are Afraid of Credit
- How to Find Out What Your Credit Scores Are
- How to Start Establishing Your Credit The Right Way
- And much more!
00:00 Do Credit Bureaus Know You Exist?
00:30 Welcome To The Homeowner Prep Podcast
00:52 People Are Afraid of Credit
01:29 See Where You Stand Right Now
02:18 Start Reporting All Your Monthly Bills
03:00 Get A Secured Credit Card
04:09 Getting Started With Homeowner Prep
04:40 Connect With Us On Social Media
“You have to establish lines of credit and create a credit profile before you can decide to buy a home.”Eric Hellon
Full Episode Transcript:
Do credit bureaus know that you exist? On today’s episode we’re going to be talking about credit invisibility and how to overcome it to buy your first home.
Welcome to the Homeowner Prep Podcast where every week we educate and encourage inspiring homeowners to help them buy their first home faster. If you aspire to own a home, you’re in the right place, so enjoy. Do us a favor and leave a review, a rating, and be sure to subscribe. Now, let’s get to this week’s episode.
Hello, and welcome to another episode of the Homeowner Prep Podcast. I’m your host, Eric Hellon and on today’s episode, we’re going to be talking about a term or a phrase called “credit invisibility” and the term means that you are simply invisible to the credit bureaus, you don’t have a credit profile yet, and you need to establish a credit profile if you want to buy a home.
Now, I know some people don’t have a credit profile because they’re simply afraid of credit. They don’t want to use credit. They believe cash is king. And all they want to do is use cash for all their transactions. And I get it, credit can be scary if you don’t know how to utilize it the right way, but you have to use credit if you want to buy a home. You have to appear to credit bureaus so that they know how much risk they need to take on in order to give you a proper rate for mortgage credit card, or even an auto loan.
So on today’s episode, we’re going to talk about how you can become visible to credit bureaus if you’ve been invisible in the past. The first thing you have to do is see where you stand, you have to know what your credit profile looks like right now, even if you think you have credit, if you think you’ve opened credit in the past, you got to know where you stand. You have to take a look at your credit report, look at your credit scores and see what’s showing up to those who are looking to extend credit to you.
The easiest and fastest way to do that is to go to annualcreditreport.com. If you go to annualcreditreport.com, you can pull your credit report once a year for free, doesn’t hurt your credit, you get to look at it, look for anything that’s not correct, and look for information that may be reporting to those bureaus that you had nothing to do with. Chances are there are some things on your report that are inaccurate. Take a look at it, see what it says, and that way you know exactly where you stand.
The second way to overcome that credit invisibility is to actually start reporting some credit lines. Even if you don’t have a credit card or an auto loan or student loan, you can start to report some of your monthly bills to your credit reports now. So take advantage of this. This wasn’t always around. This is a more of a recent trend that’s come about because there’s so many people who haven’t established credit and a lot of people in minority communities, especially. In fact, when it comes to credit invisibility, 15% of African American and Mexican American communities are impacted by this and have not established a credit profile. So be sure to at least start reporting some of the things that you’re already paying on a monthly basis.
The next thing you can do to start establishing a credit profile is to actually get a secured credit card. Now, again, you may say, “well, I don’t want to deal with credit, I’m afraid of credit” but having a secured credit card is probably the best way for you to start establishing your credit.
The way this works is you would go to your bank and you would make a deposit of say $300 or $500 and you want to open a secure credit card on that money. So it’s still your cash that you’re putting up, but what happens is you’ll take a secure credit card on that deposit and every month your bank will start reporting those payments that you’re making back to your credit bureaus. So it’ll help you establish your credit in a secure way. This is a low risk opportunity for you to get some credit going and overcome this credit invisibility.
You have to establish some lines of credit and create a credit profile before you can decide to buy a home. Most lenders are looking for three lines of credit, some will go off of two, but the majority of them want to see three lines of credit. So that might be a credit card, a car payment, and a student loan. That’ll help you qualify to buy your first home. If you need some help and some direction in this plan, feel free to reach out to us. That’s what we’re here for.
With Homeowner Prep, we can help you establish a plan, help you get your credit established and get you on the road to buying your first home. So feel free to reach out to us. You can text the word START to 619-848-3700 or you can reach us on our website at www.homeownerprep.com/start from there you can set up an initial consultation and we can help you put a plan together to overcome credit invisibility.
If you just have a direct question or a scenario that you want to run by us, feel free to reach us on any of the social media platforms. We tend to get the majority of our questions on our Instagram account @HomeownerPrep.
I hope you got some value from today’s episode. I hope you learn how to overcome credit invisibility and why it’s important when it comes to buying your first home. I look forward to providing you with some more great content on the next episode, and until then, be blessed.
If you’ve enjoyed this show and got some great value from it, please be sure to rate and review and if you’re checking it out on YouTube, please be sure to subscribe. That really does help us to continue the show and bring in some great guests to help you on your home buying journey.
Connect with Homeowner Prep:
Want to buy a house, but not sure how to get started? Visit our Start Page and we can help you, no matter where you’re at on your homeownership journey. If you enjoyed this episode of The Homeowner Prep Podcast, be sure to subscribe on iTunes and leave a review. It means so much to hear your feedback and we’d love for you to help us spread the word!