Even if you don’t know much about credit and credit scoring, you undoubtedly know that it takes good credit to qualify for most loans. You can have steady employment, two years worth of tax returns, a trustworthy smile, but if you credit report isn’t up to a lender’s standard, you can kiss a loan goodbye. And if you have a blank credit report, well, that’s just as bad.
Likewise, if you don’t know anything about credit, you may not be aware of the things that appear and don’t appear on your credit report. If you’ve never had a credit card or any type of loan, you may mistakenly believe that you have a credit history. However, just because you have monthly bills doesn’t mean that there’s information on your report.
Here are four things that do not show up on your credit report.
If you rent from a private landlord or an apartment complex, timely rent payments may not appear on your credit report. Some landlords report to the credit bureaus, however, they are not required to do so. In most cases, landlords only report rent payments when a tenant is in breach of contract.
However, if you are a renter and you want rent payments reported to the bureaus, you can talk to your landlord and request that he update your report. He is not obligated to comply, but it’s worth a shot.
You may prefer prepaid credit cards to avoid credit card debt. However, if you feel that a prepaid credit card will boost your credit history, you’re sadly mistaken. There is no application process or credit check for these types of cards. Therefore, these accounts are not reported to the credit bureaus.
If you owe a doctor or hospital, and you diligently make your payments every month, you may believe that these timely payments will build or improve an existing credit score. However, just like your rent payment, doctors and hospitals do not report to the credit bureaus unless you default. They’ll report a collection account, but on-time payments go unacknowledged.
Contact the telephone, gas or electric company to set up services and the company will ask for your Social Security number. They’ll even run a credit check and charge a deposit if you have a low credit score. But the company isn’t going to send positive information to the credit bureaus – they only report the bad.
When it’s all said and done, it takes credit to build or reestablish credit. To build credit, apply for a retail credit card, which is easier to obtain if you don’t have a credit history. Additionally, there’s the option of applying for a secured credit card. These cards are excellent for anyone with no credit or bad credit. There’s a security deposit, and the rates may be a bit higher than an unsecured card, but it’s a starting point.