How to Build Your Credit History

By Ryan Dibble, Flyhomes Mortgage

Here at Flyhomes, we work with a lot of first-time home buyers. Sometimes, this means working with clients who haven’t built a credit history.

Usually, these clients have recently moved to the US for work or are simply wary of credit cards, so have avoided building their credit history.

In either situation, what this means is that the client either has no credit score at all or has a very low one, making it difficult to find a mortgage company that will lend to them.

It is a chicken-or-egg problem … You need credit to get the score up but you need a good score to get the credit …

Here are our top strategies to help people who haven’t yet built their credit history so they can be ready to apply for a mortgage.

Get a secured credit card. A secured credit card is much like a regular credit card, except you’re required to make a refundable security deposit in exchange for a credit limit. If you fail to make your payment, the security deposit is used to pay it. Using and paying off the card will build your history and eventually you’ll be able to move to a non-secured card.

Become an authorized user on someone else’s credit card. Make sure to choose someone who has a strong credit score and who makes their payments on time. Bonus if their card has a high credit limit and a low balance. Be sure to call the credit card company ahead of time to confirm they report the results of authorized users to the three credit reporting companies—not all companies do.

Get credit for paying your rent and utilities on time. Paying your recurring bills on time is another way to show that you’re credit-worthy. You just need to do a little extra work to get that data into the credit bureaus. Many large landlords  and utility companies have functionality to automatically report data on your payment history if you ask. Experian provides a tutorial on how to do this.

Use a lender with a special program. There are some great lenders out there with loan programs specifically for relocating employees at tech companies. Flyhomes Mortgage doesn’t yet have such a program, but we’re happy to connect you with a company that does if you’re still in the process of building your credit history.

It takes some work to establish and build your credit history, but that work is worth it if you can get the mortgage loan you want … and get it at a great rate!


Check out our other credit-related articles: 8 Ways to Improve Your Credit Score and “Will This Hurt My Credit Score?” 5 Credit Myths, Debunked.


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