Q: First off, what does it mean to be credit invisible?
Not enough credit history to establish a credit score.
Q: And so why is it important to establish credit?
Because you will need good credit for various things like buying a house, condo or car, renting an apartment and various other things.
Q: How can we help those who are credit invisible feel comfortable engaging with credit and financial services for the first time?
Have open, candid and positive discussions about credit and provide sound education.
Q: What age should you begin establishing credit?
It is not at a certain age, it most certainly when you have mastered managing your money. Or at the very least have a sound budget.
Q: How can you begin to establish credit?
One way is a secure credit card. Here is a good video on secure credit cards. Check Here
Q: What barriers may you encounter when trying to establish credit?
Not qualifying for loans that you apply for as your score helps the company to determine the risk level and if you don’t have a score that is a total risk for them.
Q: What research should you do before applying for credit?
First, do you really need it? Then interest rates and fees.
Q: What are steps to manage credit and improve your scores as soon as possible once you have established credit?
First step is to ensure you have an active budget. You know the due dates so you are never late on a payment. To improve your scores you have to understand how credit works. Here's a great video.
Q: What are some pitfalls to avoid when establishing credit?
Do not pay bill late. Always pay on time even if it is the minimum. Don’t max out the credit line and try to not carry a balance that is greater than 25% of the credit limit.
Q: Any final tips for establishing credit for the first time?
Be sure you are ready to take on the responsibility of credit. Also, understand each component of your credit score so you know you can make good decisions. Here 2 resources to help you track and build your credit:
1. Credit Card Builder
2. Free Resources
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