Being “credit invisible” in Utah means lacking a good credit history with one of the top credit bureaus in the United States. If you are in this position, you are automatically at a disadvantage when applying for loans.
Since traditional lenders rely on consumer data provided by credit bureaus, you have little information to prove you are a low-risk borrower.
4 effective ways to get out of your credit invisible status:
#1. Take Out Unconventional Loans
Because of title loans, savvy consumers put a premium on regular ATV tune-ups in South Jordan and routine motorbike maintenance in Salt Lake City.
These secured loans allow using a motor vehicle as collateral without surrendering it outright. Instead, you can leave the title to the lender until the loan is repaid completely.
Detractors warn against applying for a title loan, which comes with eyebrow-raising interest. However, it is one of the most convenient financing options for individuals with bad credit.
How does title loan lending help you overcome your credit invisibility? Two words: credit building. Believe it or not, not all title loan lenders want you to be their customer forever.
Many of them will report your payment data to credit bureaus to help improve your credentials to qualify for more favourable loan conditions.
#2. Be a Punctual Renter
If you ever wish to buy a house someday, being an outstanding renter can help you attain homeownership more quickly.
Rent is not a debt per se, but it can also improve your creditworthiness if you always pay it on time. Unconventional lenders (and some traditional financial institutions) go to extreme lengths to scrutinize a borrower’s rental payment history to make a more informed credit decision.
To document your rent payments, you might need to subscribe to a particular service first, like Rental Kharma or RentTrack, for a small fee.
Also, it would be best if you had your landlord’s cooperation to report everything. Without proper verification from your landlord, you might not be able to record all of your rent payments.
#3. Use Your Checking Account to Maximum Effect
Traditional banks, credit unions, and finance companies usually want to know the balance in a borrower’s checking account to see if there have enough cash reserves and if they are seasoned accordingly.
However, unconventional lenders can also analyze how you receive and spend your money to depict your financial health accurately.
It pays to be more particular about your average deposit, the number of deposits made every month, and the bills you pay with your checking account.
#4. Work with Fintechs
Most importantly, apply for a loan from a company that uses all alternative data sets. Fintech lenders do things differently and do not rely heavily on credit bureaus.
Instead, they develop and use innovations to serve credit invisible like you. As a result, fintech dominates the personal loan market share, growing its market share from 5% in 2013 to 38% in 2018.
Because of advanced technology and forward-think financial institutions, credit invisibility is slowly becoming less of a concern. But then again, you still need to do your part and take the initiative to beef up your qualifications in every way possible.
- How Credit Cards can be The Reason for Bad Credit Score?
- Why Do Credit Card Payment Help Reduce Payday Loan Defaulters?
- Credit Cards: What you Need to Know
- Tips To Choose The Best Travel Credit Card in 2020
- How To Avoid Credit Card Debt?