How to Establish or Build Your Credit Score to Qualify for a Mortgage

I’ve intended to write a piece about this for quite some time, and a recent experience has inspired me to finish.

We live in a digital age. Most people have bank accounts and a credit score, but there are millions who don’t use conventional banks or have any established credit. That may be hard to fathom, but I run into them enough to know they are out there. Most of them are hard working, employed, and contribute to society. They aren’t off the grid, but they live a simpler life. The most recent client I helped is a good example. He is in his 60s, lives in a family home that was purchased by his late in-laws decades ago, and works as a mechanic for a local municipality. He has a savings account but eschewed having a checking account because of something that happened 30 years ago.

He has never applied for a loan or credit card, and has no credit score with any of the 3 agencies (TransUnion, Experian, Equifax).

I have helped dozens of people establish or rebuild their credit. These are the steps they took.

1. Apply for secured credit cards. Virtually every bank has a credit builder program, where the consumer send them a $200-$500  security deposit, which becomes the account credit limit.
2. Once the accounts are established, the card arrives in the mail within a few weeks.  It will be a Mastercard or Visa, but I also know Discover has a program. Once the card is received, buy a tank of gas or a few groceries with it, then pay the balance to zero.
3. It is best to establish 3-4 accounts minimum. Not every credit card reports to all 3 major bureaus, and  only 1 or 2 accounts aren’t always enough.
4. This is not a complete list because, as I said almost all banks have a secured program of one kind or another.  I have personally seen results from these institutions:
   Capital One
   Merrick bank
   Open Sky
   CreditOne
   The links should work, and you’re welcome.