Credit report

No credit history? You can build a credit report without going into debt — here’s how

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Approximately 26 million Americans are considered “invisible credit” – meaning they have no credit history according to Experian, TransUnion or Equifax, the three major US credit bureaus. Of these, Black and Hispanic Americans are more likely to have no credit history than Whites and Asian Americans.

Don’t have credit history can present major challenges if you’re hoping to get loans from banks and other lenders, or if you’re trying to secure basic livelihoods, like renting an apartment, buying a car, or even finding a job. Historically, credit reports can only be compiled through traditional methods – paying off loans or using a credit card, for example. However, due to the cyclical nature of the US credit system, if you don’t have a credit history, it can be difficult to get a loan or a credit card in the first place.

The newly launched Experian Go service could help the “credit invisible” jump-start their credit by creating a free Experian credit report. Then you can increase your score by reporting on-time bill payments through Experian Boost or through traditional methods, including using a credit card to establish on-time payment history.

Experian Go can be helpful for anyone struggling to establish credit, but it’s not the only way to put yourself on the financial map. Here’s everything you need to know about Experian Go – how it works, who it’s best for, and what to consider before signing up.

What is Experian Go and how does it work?

Experian Go allows Americans with no credit to create an Experian credit report almost instantly. Experian first rolled out this service in October 2021 to around 15,000 people. It reports that on average, 91% of users who linked daily cash accounts to newly created credit reports went from no FICO score to 665, a fair-to-good credit metric.

Free membership to Experian Go also provides access to financial training and recommendations, as well as a marketplace of financial products and offers. The company plans to offer Go users credit cards — its current partners are Petal and Capital One — including cards aimed at consumers with limited credit histories.

Jeff Softley, President of Direct to Consumer at Experian Consumer Services, explained how Experian Go allows consumers to create a credit profile and receive a credit score “without going into debt.” He continued, “It’s a great innovation because it’s a stepping stone, allowing consumers to acquire a financial identity and enter the financial ecosystem on their terms.”

Once your Experian credit report is created through Experian Go, you can start building your credit and expect to see your FICO score after about six months. If you don’t want a credit card right away, you can sign up for Experian Boost, which links debt-free accounts such as phone, utility and streaming bills to your Experian credit report. Remember that it is essential to pay on time, otherwise your credit could go down.

Ted Rossman, senior industry analyst at Bankrate (which is also owned by Red Ventures), views Experian Go as a net positive. “Our credit score is one of the most important numbers in our financial lives,” he explained. “And Experian Go – as a free, secure, and beneficial program that builds credit – is great. It’s also low financial risk because Experian Go can’t harm your credit score.”

Who is Experian Go for?

If you don’t currently have a credit score or credit history, Experian Go can help you get established. This option is best for anyone with no credit who is having trouble getting a credit card, loan, or other credit-based account approved. Experian Go can also help if you need to build a credit history to get approved for an apartment or job, but don’t want to risk a credit card.

Disadvantages to consider

Although Experian Go is free and can get you started on your credit-building journey, there are a few things you need to consider before signing up.

1. Experian Go only has a direct impact on your Experian credit file

Experian Go only creates an Experian credit report. This means that for lenders to see your newly established credit, they will need to pull data from Experian and not one of the other two bureaus. Additionally, it will also only work with the new credit scoring algorithm, FICO Score 8. This means that Experian Go will not directly help you get a mortgage, as lenders will usually ask for your three credit reports and are also mandated to use older versions of FICO.

Although Experian Go only benefits your Experian credit score, Rossman notes that it can be used to establish credit with other bureaus. For example, if you apply for a credit card that only pulls data from Experian and you are approved, then that card will appear on all three credit reports, allowing you to start building credit within three credit bureaus.

Most credit card providers only use one credit bureau, but they don’t advertise which one they use in advance. So while this approach may help you get approved for a credit card, it’s a bit of a gamble. If the card provider uses Transunion or Equifax, you may be immediately declined, as you will not have a credit report with either bureau.

That said, even without Experian Go, you can apply for the Chime Credit Builder Visa®* Card, which does not require a credit check, or the “no annual fee” Visa® Petal® 1 Credit Card, which can combine your credit report with your banking, spending and savings data to compile a cash score. You can also apply for a secured credit card – a card that requires a security deposit as a line of credit – which does not require a credit check. All of these options can help you establish yourself with all three credit bureaus.

2. Cybersecurity breaches can be concerning

At a time when data sharing is a major concern and where previous credit bureau cybersecurity breaches have led to widespread identity theft, Experian Go will ask you to provide access to personal and private data. However, Rossman notes that, “when it comes to privacy concerns, credit bureaus already own much of the data that Experian Go could potentially collect.”

3. Experian Go collects and sells your data

Increased data collection is often used by credit monitoring companies, such as Experian Go and Experian Boost, sell products and services to customers it may not be in their best financial interest and could even put them in debt.

Rossman advises taking Experian Go’s suggested products with a grain of salt and be wary of marketing and cross-selling. That being said, he adds, “I feel good with the partners they have now. Capital One has a great reputation, and Petal is also known as a good way for young people to get credit.”

How to register

To register, you will need to download the free Experian mobile app and confirm your identity by submitting personal information, such as your legal name, address, date of birth, and the last four digits of your social security number. You will also need to upload some form of identity verification, such as a driver’s license or passport, and take a selfie. Softley says the whole process takes an average of four minutes. At the end, you will have created your first credit report.

Can I build my credit score without Experian Go?

Yes. Although Experian Go can help you quickly build and grow your Experian credit score, you don’t need this tool to build your credit. These traditional options will allow you to establish your credit at all three credit reporting agencies.

  • Apply for a credit card: A credit card is the fastest way to build credit, but it usually requires a credit history to apply. However, student credit card, secured credit cards and credit cards can be excellent choices for invisible consumers of credit. These cards don’t typically offer flashy rewards or bonuses, but when used strategically — paying off your full balance each month — they can help build and grow your credit history.
  • Become an authorized user: If a financially responsible spouse, family member, or friend has a credit card, they can add you as an authorized user. This way, every time the cardholder uses their card or makes a payment on time, your credit profile will be boosted. Keep in mind, however, that the cardholder’s negative credit behavior, such as late payments or the card’s credit limit, will also affect your credit report and theirs. Depending on the card, you may also be able to make purchases, although this is not necessary to affect your credit history.
  • Apply for a builder credit: A credit builder loan works a little differently than credit cards. It requires a stable source of income to be approved and rather than giving you the loan amount up front, the money is held in a separate bank account, while you make monthly payments to repay the loan and its interest . The lender will report these monthly payments to the credit bureaus, helping you establish and grow your credit. Once the loan is paid off, you will have access to the funds (and any interest earned, which will accrue at a significantly lower rate than the interest you paid).

* All Chime Credit Builder Visa card information has been independently collected by CNET and has not been reviewed by the issuer.