YOUR CREDIT AND YOU
by John Nunez
BERKSHIRE HATHAWAY HOMESALE
Member of the Loree Foster Team
I do not have credit in the U.S.how can I create it?
There are several ways to create credit, necessary to obtain credit cards, mortgages or
other types of loans.
Your payments to credit cards and creditors are reported by these to three official credit
agencies that are Experian, TransUnion and Equifax (for more information
http://www.Experian.com, http://www.TransUnion.com and http://www.Equifax.com).
The three agencies record your payments (whether positive or negative) in a file under
your name, address and social security number. That record will follow you as long as you
The good news is that these three agencies, in accordance with the federal credit reporting
Act or FCRA (for more information look for Federal Credit Reporting Act) have no power to
change any data, unless you require it and show them proof that the information contained
in your credit report is not accurate.
That’s why it’s so important not to let anyone know our social security number.
All lenders in the United States are required to obtain credit reports, upon request, from
those agencies as a determining factor in approving a loan. In the United States, getting a
mortgage is essential to buying a house.
The elements that influence the decision of the lender (whether it is a bank or a private or
private lender) are: your average credit score, that is, the average score of the three
agencies already mentioned, and your ability to pay.
The ability to pay is extracted from your behavior as a consumer. A document that serves to determine that behavior is your bank account. That is, if everything you earn “ends” or spends, that is considered negative.
Therefore, the issue of saving is a point because it requires discipline. The simplest and
most advisable way to save is to establish a double bank account, that is, checks and
savings in your name, where you can automatically transfer a certain weekly sum. So, over
time it’s like you’re going to get an amount that you will not believe yourself!
Over time this automatic transfer of a certain amount from your checking account to the
savings account is a very comfortable habit.
As it is necessary to have at least three lines of credit established to generate a credit
score that is respected by the borrowing institutions, the first thing is to establish said lines
of credit. For this, several systems are used.
First – you can apply for a secured credit card to a recognized institution (called Secure
Credit Card) being one of the most recognized Capital One.
Second – You can get a “credit generation loan” (which in English is called CREDIT
BUILDER LOAN). One option is to enter the SelfLender.com program.
The “credit builder loan” is designed to help people who have little or no credit history to
generate credit. A good score facilitates the obtaining of credit cards and mortgage loans,
at better interest rates.
If you do not have credit, and even if your score is low, you can be approved for a loan of
this type. The only condition is that you have enough income to make monthly payments.
The system works like this – the amount of the loan obtained is kept in a bank account,
while you make the payments. Your payments are reported by the guarantor to the three
agencies that determine your score: Equifax, Experian and TransUnion. Because credit
scores are calculated from your positive or negative credit reports – when payments are
made on time or when you fall behind, that is when your payments impact the score up or
In general, most institutions search for an average score of the three agencies of 620.
What they call the magic number.
In the case SelfLender the enrollment in the program is $ 15 and from the following month
you must contribute $ 48 per month for 12 months. As you make your monthly payments
on time, those payments are reported by SelfLender to the three credit bureaus. At the
end of the program you will then have $ 575 saved and you will have already established a credit score.
Of course, SelfLender is not the only one that offers this type of programs. It is possible
that your bank has this type of system, you just have to ask.
Third – You can apply for mortgage or credit with a guarantee backing (co-signer).
Fourth – Become an authorized user of another person’s credit card – can be a spouse,
parents, siblings, friends, etc.
Fifth – Ask the person or company to whom you lease your house or apartment to report
your payments to the three credit bureaus. Some people or companies do it. In any case
keep receipts of your rent payments, that serves as an alternative credit.
Sixth – Alternative credit. The alternative lines of credit such as rent payments, telephone,
cell phone, electricity, gas, car, can be used to generate alternative lines. It is good to
always keep the receipts and if you pay online, make an impression of the payment history
of each one.