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Can't build credit because don't have credit - vicious circle
I have a problem that I am not sure how to solve. Essentially, I can't get credit because I don't have credit. The only factors contributing to my credit thus far are an auto loan (paid in full, double payments every month - I am a co-signer) and an "authorized signer" credit card I opened with a parent.
Prior to these two accounts, I had no source of credit, as I never applied for a "student credit card" or anything else that gets people into financial trouble. My credit has not increased significantly over the last two years of having these accounts. What can I do to increase my credit score? I have tried to be approved for a low-limit credit card and consistently get denied.
I have no outstanding debt other than a small amount on the car loan. I couldn't even get the loan without a co-signer and the credit union I have the loan through will not remove my co-signer even though the loan is paid in full every month for more than is owed.
It is a vicious circle I cannot get out of.
I am now at a stage where I am ready to purchase a house and have a very large down payment set aside, but there is no possible way I will get a mortgage if I can't even get a credit card. Any advice is appreciated.
Asked by
kimboslice13
5 months ago
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Yes, you can get out of that vicious cycle, though it may take some time. Best place to start is usually with a secured credit card. Use it responsibly for a while, making all payments on time and keeping your utilization under 30%, and you'll start looking good. However, you should also talk to your potential mortgage lender. With a large down payment, a paid-off auto loan, and (presumably) a good income, they may be able to work with you. In any case, they can give you advice on how to proceed.
Clairissa 5 months ago