[JamesJB]

Hi,how can I have Bad Credit when I had no credit in the first place? I have never had a credit card in my life just a Debit Card.

I tried asking my Bank this same question but it seems like they get a attitude or they get huffy about it. I mean I ask nice and everything I don't get a attitude with them.

Its confusing on how I can have bad credit when I never had any in the first place.

Also when I go to these place's where you can get a free credit report and I put my info in it says they find nothing,its like I don't exist.

One other thing,how can I establish credit? Or make my credit good? I don't work at the moment,I'm on SSI

Please help

P.S. Hope my questions made sense. :(

[tickle]

Who is saying you have bad credit ?

Tick

[ScottGem]

Bad credit and no credit are different things. Basically, there is ONE company that has developed a standard rating system for credit. This system (which is a closely guarded secret), takes in a number of factors and produces a credit score. Some of those factors are your existing credit history. So you get points for having had credit accounts before and paying them on time. If you have never had credit before, you don't get those points so you may end up with a lower score. This is why its recommended that young people take out some credit and pay it back on time to establish their credit.

[XTC832]

As with Scott's post, there is a huge, huge difference between bad credit and no credit. For so long, the lending industry has relied on the famous FICO score to determine whether a would-be borrower could get a loan, a mortgage, credit card, etc. The workings of this system, as Scott mentioned, are a near mystery, except for the idea that the higher your score, the better. But this is not always the case. If you ever listen to financial guru Dave Ramsay, you will hear him preach about becoming debt free. There are many consumers out there who don't have credit cards or any other debts. They owe nothing, yet their credit scores are on the terrible scale. This is not bad credit and it's not a bad situation. There's just no yardstick here where lenders can measure your financial performance. "Bad credit" is the result of too many defaults or being too over extended. Becoming debt-free is the new status symbol in America.
If most debtors could become debt-free and have total financial freedom, it's likely they wouldn't care what their credit score is. Take some good advice, staying off the charts and under the radar is a pretty good deal right now. But if you want to start "existing" in the credit framework, start slowly, be careful and monitor everything. Good luck!

[JamesJB]

Who is saying you have bad credit ?

tick

Well a few people,one time I tried getting one of those department store credit cards just so I can try to establish credit,they said no cause I had bad credit and I didn't make enough a year.

Just recently I went to the Apple Store and they said cause of my bad credit it will cost me $150 deposit to activate a iPhone.

Also just recently I went to the Verizon Store and went to see what sort of deposit id need for the Droid they said $125 deposit cause of my bad credit.

I went to a few places online to get a credit card to establish credit and they either said I didn't exist in any of the credit check places or my score was way too low :(

This is the reason why I kept asking myself "How can i have Bad Credit when i never had any in the first place?"

I really want credit cause I can do the payments some of the stores ask without a problem,plus someday before I get too old I would like to own a home :(

[Stringer]

I think that when they tell you that you have 'bad credit' they are using the wrong terminology.

About twenty some years ago I lost a business and eventually paid off all my debts. I then decided that I would not have debt and paid for everything in cash. When I started my present business as a Sub S Corp my personal credit was a factor for my business. It was that I had no credit, not bad credit and in a way they are the same, in that they need a track record of your financial dependability. And with no record of my financial history it was as if I didn't exist credit wise. One financial company said that for all they know (without checking further) that I could have been in prison for that period.

I set in motion with help from my attorney and a financial adviser a very basic plan. I got a 'secured' credit card. What that is; you make a deposit of a certain amount, $500, $1,000 or more to the credit card company (they pay you interest on this deposit). You then have credit up to your deposit amount and begin to establish a credit record.

Now... my advice (and I am not a financial adviser, just my experience); do not use more than 50% of the available credit line.

Make ALL payments on or before the due date, do not EVER be late. During this process, do not pay off the amount due each month, you want a record of good payment.

Initially talk with this credit card company and establish when you will receive your deposit back and have a regular credit card. Your interest rate initially will be high until you do get a good record, and this can take some time. Usually you will receive you deposit back in about six months to a year. Or if/when you close the account. Google 'secured credit card.'

There are three major credit reporting companies, make sure that they all have your records. You can Google their names.

I now have a credit rating well over 800 average with these three companies. It takes time, be patient, but you will have to start somewhere, sometime.

Take action now.

Stringer

[excon]

Hello James:

Credit cards USED to work for the consumer... NOW, they work ONLY for the bank. IF you can avoid using consumer credit (as opposed to a home loan), you'll be MUCH better off.

The problem you have is establishing credit to the degree where you can qualify for a home loan, without getting caught up the debt cycle that is strangling middle class Americans.

Listen to Stringer. He has it right.. DON'T be like my ex wife who only heard the first part of my recommendation to get a credit card. She didn't hear the second part which was to pay them off each month...

It's a hell of a balancing act. MOST people can't do it, and plunge headlong into serious debt. Let's hope you're one of the people who uses credit, rather than letting credit use them.

excon

PS> I'm like you. I have ''bad" credit, because I owe NOBODY. But, I'm cool with it because I don't WANT to buy a house. And, I certainly don't want to put my hand in the wood chipper known as Visa.

[ScottGem]

Did anyone actually say "bad credit" or did they just say your score was bad or too low? Again there is a difference.

You can get a free credit report annually. There are services that will tell you your credit score for a small fee.

Maybe you need to see what's there.

[Fr_Chuck]

I think the confussion is "bad" credit compared to a low credit score because of no credit. Often the store clerk does not know why you have a low score, just that you have a low score .

You will need first of course to have enough earnings to afford the credit.
Start with some of the ( sadly) high interest or secure credit cards and charge minor things paying it off each month. Then go and try after 5 or 6 months getting a gas station card.
Then in a year you should be able to get a regular credit card.

I have a few credit cards that I pay off each month just to build credit.

[JamesJB]

Thank you guys for the help/advice.

They all mainly said bad credit.

[Fr_Chuck]

Yes, if it comes back with a score of 550, that is a low score, but if you tell anyone that you have a score of 550, they will automatically say you have a bad credit score. It is "bad" into the effect it is low.

I am not sure what the score is if there is NO credit. Because you have to actually have creidt to have a good score.

My mom and dad never had a credit card, did not borrow any money after 1945 when they bought their first home for about 4000 dollars.. And paid it off to the owner ( owner finace) in 2 years.

So there was nothing on their credit report. They could go in and buy a new car for cash, but would have never been able to even get a TV set on actual credit.