This is what credit invisibility is and how it works

This is what leistungspunkt invisibility is and how it worksThis is what credit invisibility is and how it worksYouve probably heard of bad credit or good credit, credit scores and credit reports. But have you ever heard of the term credit invisible? Probably not Credit invisibility is when a person has no credit history whatsoever. This means that they have nothing in their history to say that they have good credit or bad credit. Theres just no credit at all. In 2015, theConsumer Finance Protection Bureaufound that 26 million Americans are actually credit invisible.Follow Ladders on FlipboardFollow Ladders magazines on Flipboard covering Happiness, Productivity, Job Satisfaction, Neuroscience, and moreWhy Does It Matter?Your credit history and credit score determine what you will or wont be approved for. This can affect your ability to get a home loan, a car loan, a student loan, a credit card, etc. I can also influence whether or not someone can get a job or an apartment, since man y employers and landlords now check peoples credit before accepting them. All of ansicht limitations can have a huge negative impact on peoples lives. Becoming credit visible is an important way to open up a world of possibilities.How to Become Credit VisibleGetting approved for credit is a lot like getting a job. You need experience in order to get hired, but you cant get experience without hired chosen first Creditors want you to have a history of credit, but you cant build a history of credit without having been approved for credit first. However, there are ways to prove yourself as a responsible customer even if you dont have the credit history that creditors prefer.Get a Secured Credit CardWhen I first graduated from college, I had never had a credit card, but I knew that I wanted to get one. My parents recommended that I get a secured credit card through their credit union. The card had a very low limit of $500 so that I wouldnt be able to overspend too much. I had to put $500 (lets be honest, my parents gave me the money) in a CD as collateral. This meant that if I maxed out my credit card but wasnt able to pay it back, the bank had the CD to pay themselves with.A secured credit card is helpful for you and your creditor. Youre able to build your credit while also not putting yourself at risk over going way into debt. Your creditor isnt putting itself at too much risk because your limit is low and there is usually collateral for them to pull from.Talk to your bank and see if they offer a secured credit card optionGet Added As An Authorized UserA very easy way to build or improve your credit is to be added as an authorized anwender on someones credit card. This is when someone already has a credit card and they add you as an authorized user on it. In this scenario, you dont even have to have access to the card itself, just the history of that account. That card starts to be reported to credit bureaus under your name, so that you have the benefit of the (h opefully) positive credit history.(TipIf you do get access to the card to spend on it, make sure you only spend what you are able to pay back. You dont want to hurt your relationship with the account holder if you are unable to pay off your portion of the credit card balance.)Of course, you should make sure that you trust the person who is adding you as an authorized user. If you get added and then the account holder misses payments, your credit history will be harmed. Youll want to make sure that the main account holder will make their payments on time and keep their debt to credit ratio low. Otherwise, their negative credit history will become your negative credit history.Have Someone Co-Sign a LoanIf you need to get a loan but you have no credit, you can get someone to co-sign it for you. This tells the creditor that even if you default on a loan, there is someone else who will be responsible for paying it. And really, creditors really just want to make sure that someone will pay them back.Getting a co-signer can also give you better rates on a loan. When the lender sees that there is someone with good credit also responsible for the loan, they are more willing to give lower interest rates. For example, my little sister is exploring refinancing her student loans. The person she spoke to at the bank suggested that my parents co-sign the consolidation loan so that she could get a lower interest rate. Thats not the route she will probably take, but she was surprised that it was an option for her.(NoteThis is a huge commitment for someone to make for you. Youll want to come to an agreement up front with the co-signer. It could even be a written agreement that you come back to later if anything goes wrong. You dont want to put your relationship with the co-signer, or their financial stability, at risk, so make sure that you are able to pay back the loan on your own.)Get Credit for the Rent You PayUnfortunately, if youre being a responsible adult and paying your rent every month, the credit bureaus dont always know it. However, you can sign up for rent-reporting services, such asRental KharmaandRentTrack, that take bills youre already paying and report them to the credit bureaus. This can show lenders and creditors that you have a history of responsibly paying your bills. Its a great way to show that what youre already doing matters and have it show up on your credit report.Of course, there is a fee that is associated with these services. And unfortunately, not all credit bureaus take this into account. But if you want to start building credit, and are unable to do the above options, this is one route to take.If you take one or more of these steps, youll be on your way to credit visibility. Over time, youll even have good creditThis article originally appeared on Maggie Germano.You might also enjoyNew neuroscience reveals 4 rituals that will make you happyStrangers know your social class in the first seven words you say, study finds10 lesso ns from Benjamin Franklins daily schedule that will double your productivityThe worst mistakes you can make in an interview, according to 12 CEOs10 habits of mentally strong people