How can i build credit if I can't get any?

How can i build credit if I can't get any?
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#1

Hello. New here, first post. I was divorced a couple years ago and ended up with 0 credit. Seriously, EQ told me I literally had no score so I took out a used car loan. Unbeknownst to me, I was left with over 30 inquiries from the car lot trying to find financing. I tried after that to get a credit card, gas card, something anything. I have one installment account (1.5 yrs old) and one revolving account (3 years old) with no late payments. 1 medical collection on 1of 3 credit reports. Nothing else. No one will give me a chance! Very frustrating. Any suggestions?


#2

Hi, @crazzyyh, and welcome to the NerdWallet community.

Yes, there are ways to build credit. But first, some questions for you. How recent were those inquiries when you were applying for a car loan? Those should have been considered as a single inquiry for credit-scoring purposes. But even if they were not, the impact of hard inquiries on you score disappears after 6 months. The inquiries themselves should fall off your reports at two years.

Here’s what I would suggest:

  • Check your credit reports at all three credit bureaus if you have not already done so in the past 12 months (you are entitled to at least one free credit report from each every 12 months). If you see inaccurate information that could be hurting your score, dispute it.

  • You mentioned a collection on one credit report. Is that accurate? If not, please dispute that. A collections is a serious blemish on your credit report, but its impact fades with time.

  • Consider a credit-builder loan and/or a secured credit card. Those are both products aimed at consumers like you who are having trouble finding opportunities to prove themselves creditworthy.

Once you have credit accounts, pay on time and use credit cards lightly — using no more than 30% of the credit limit, and lower is better. (But do use it some; never using it doesn’t demonstrate that you can manage credit well.) Those two things account for more than half of your score. Other factors matter, but on-time payments and low credit utilization are crucial. It’s also a good idea to check credit regularly — that helps you better connect what you do with how it affects your score, and it also could alert you to an error or identity theft earlier, when it’s easier to deal with.

Good luck to you, and please let us know if we can help further.