<p>I would like to share here what I believe to be good, reliable information based on my own research and experience. If anyone doesn’t agree with the information below, feel free to research on your own or to simply ignore it. Note that I do not work in the financial sector. I am simply an ordinary consumer and parent. I realize that mine is not the definitive approach; there are many ways to skin a cat. </p>
<p>There are companies that people make payments to on a regular basis, such as utility companies and property managers, that do NOT routinely report to the credit bureaus except in the case of VERY late or skipped payments. Therefore, since they do not report GOOD financial behavior, only slip-ups, by simply paying your monthly bills on time you aren’t necessarily building a credit history per se, at least not a credit history that is immediately apparently to anyone who checks your credit report, such as landlords or prospective employers.</p>
<p>So, what DOES get reported to the credit bureaus? Credit card accounts do. Department store charge cards do. Mortgages do. Loans, including car loans, do. This is not an exhaustive list, so if you have something to add, please do. </p>
<p>Not all of the above-named types of lenders or creditors report your balance and payments every month, however. Some will only report to the credit bureaus on a quarterly basis. I have been told by people in the financial industry that the more frequently your creditors report your payments and balances, the faster your credit builds. So when taking out a credit card or loan in order to build your credit, it’s worth double-checking that the company will report to the credit bureaus on a monthly basis. </p>
<p>While some companies only report to one or two of the credit bureaus – Experian, Equifax and TransUnion are the main ones – others report to all three. My understanding is that, given a choice, it’s somewhat better if your info is reported to all three credit bureaus so as to maximize your credit scores with all three. Otherwise, you will have a lower score with the credit bureau(s) that aren’t aware of the other credit lines you have open. I have found this to be true from looking at my own credit reports from each of the three major credit bureaus. I have three credit cards, two of which report to two credit bureaus, one of which only reports to one bureau. This could be a problem if no one at all is reporting to one of the credit bureaus. Ask the lenders/credit card companies who exactly they report to.</p>
<p>If you decide to get a credit card to build your credit history, it’s very important that the card report the actual credit limit on the card and not just the amount charged each month. I suggest you be insistent when asking the financial institution about this and about the other variables mentioned above (frequency of reporting, reporting as secured versus unsecured, etc.). Often, customer service reps will have no idea about these and other details, so speak with the supervisor or manager directly to make sure you’re getting accurate information. </p>
<p>Even after you’ve tried to do everything right to help establish a glowing credit history for yourself, how can you know for sure what is being reported and what isn’t? By requesting a free annual credit report from each of the three credit bureaus. A federal mandate requires the credit bureaus make these reports available to every adult in the United States and, while the credit bureaus are not obliged to provide your actual credit score, by paying a small fee you can have the score added to your free report. BE VERY CAREFUL to use the one government-approved webpage to request your free annual credit reports. There are a lot of similar-sounding webpages that will try to get you to sign up for paid reports. When you get your free annual credit reports, I recommend you sit down and comb through them for inaccuracies and, frightening as this may sound, identity theft. Learn about the meaning of “hard hits” and “soft hits” to your credit report. Ensure that the cards you have taken out are, in fact, reporting your full credit limit and not just the amount you have charged that month. Any financial information on your credit report that you don’t recognize or don’t agree with should be reported to the credit bureau, which will do an investigation and correct the irregularity. </p>
<p>Another source of credit information that won’t cost you anything is available through websites that provide “FAKO” scores, which are calculations that simulate what your real credit scores are. (The name of your real score from the credit bureau Experian is “FICO” score.) The websites providing FAKO scores are run by companies that will try to get you to take our more and more credit cards. Ignore their hype. I was advised that three credit cards plus a loan such as a car loan or a longer-term financed purchase from a store are enough to build a pretty strong credit history and, in my case, that proved to be true. By the way, it really isn’t a good idea to be “fishing” for credit, so don’t ask too many financial institutions for credit simultaneously because it can negatively affect your credit score. Space out your new accounts. Take out your first credit card and then wait a few months before applying for a second one.</p>
<p>After living outside the U.S. for 19 years, I came back to this country and had to build a credit history for myself from the ground up. Shortly after my arrival back in this country, I (na</p>
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