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No Credit History: Not Just a Problem for Young Adults


Your Credit Could Disappear If You Haven’t Borrowed Recently

A lack of credit history is a common concern for young adults, but it can also be an issue for financially established individuals who opt to pay cash instead of getting loans or using credit cards.

Disappearing Credit

Someone who doesn’t have credit history that appears in a credit report might be referred to as a credit ghost or as being “credit invisible.” Although a credit ghost might have borrowed money in the past and once had a credit history, that history has disappeared from credit reports because the loans were not recent.

This can happen if you have paid off your mortgage, buy vehicles with cash, and use a debit card instead of a credit card. Additionally, if you use a credit card in your spouse’s name, your partner could have credit related to your card usage, but you may not.

Having a thin credit report can also be problematic, says SLFCU Consumer Loan Manager Chris Quintana. “If there is no auto loan history showing on the credit report,” he says, “we have to look at other factors, like disposable income, to decide how much we’ll lend, and we may require a larger down payment.” This could also impact how quickly a member receives an approval for an auto loan.

Even if you’re approved for a loan without having a credit history, you could end up paying a less favorable rate.

Living outside the U.S. for a few years can also weaken your credit history since not all credit reporting operates internationally. Continue to use a domestic credit card if you’re living abroad to maintain your credit history.

Keep your credit current.

The easiest way to make sure your financial activity is resulting in credit history is to use your credit card. If you are not the primary cardholder, be sure your card usage is shared with the credit bureaus. “If we don’t have a social security number and date of birth for the joint cardholder, we can’t report,” says Jeff Morris, SLFCU Card Services Manager. If your credit card isn’t listed on your credit report, contact your card issuer to make sure they have the necessary information.

There are other benefits to using credit cards, such as such as rebates, shopping and travel benefits, and zero liability protection against fraud.

“You may also want to consider getting a low-rate auto loan even if you could pay cash,” Chris says. This keeps your credit file active while leaving your cash available for emergencies or higher-earning investments.

If your credit has completely disappeared, he says, you can apply for a savings secured loan to start rebuilding. Funds in an SLFCU savings account are held as collateral for this type of loan.

Duplicate credit reports

Credit reports are not always straightforward even for individuals with a credit history. “Sometimes we pull credit reports and they show only one account,” Chris says. “This is usually an indication that a duplicate credit report has been created. A member probably has a report that lists most of their accounts and loans, but a second report was created in error with a single loan or account.”

Files can become mixed when an individual has the same name as a family member; junior and senior designations commonly cause problems. Or loan information might be reported under the wrong social security number, so an additional report is created.

“Check your report regularly to identify and fix these types of errors,” Chris advises.

Obtaining your credit report

You may request a copy of your report from each of the three nationwide credit reporting agencies through, the only website authorized by the Federal Trade Commission to provide your free credit report. You may request one free report from each agency once every 12 months.

Since not all organizations report to all three agencies, it is important to review your report from each one to look for errors and even signs of identity theft. You may order all three at once or stagger them every few months so you are checking your report regularly throughout the year. 

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