Consumer Financial Protection Bureau Offers Tips For Fixing Common Credit Issues

Thursday, May 24th, 2018
Updated: May 24th, 2018
The content is accurate at the time of publication and is subject to change.

Having poor – or nonexistent – credit history can be a big problem when you apply for a loan, an apartment, a credit card, or even a job. Because many people struggle with this issue, the government is stepping in to offer advice on building, improving, and protecting credit history.

The Consumer Financial Protection Bureau (CFPB) has identified three common credit problems that can trip up even the most conscientious credit user, and explains how to address these issues so folks can achieve a credit score that enables them to get the loans, jobs, credit cards, and apartments they need.

The first common problem is lack of credit history. This can occur when people avoid applying for credit in the first place. They often don’t realize that having no credit history at all can be just as bad as having a negative credit history.

The CFPB says one in ten adults have “credit invisibility,” which means that none of the major credit bureaus – Experian, Equifax, and TransUnion – have any record of them. And people with what’s known as “thin” credit do have some credit history, but not enough to generate a credit score.

The best way to build credit is to apply for a secured credit card, a retail store credit card, or a credit builder loan. Make on-time payments and borrow money responsibly and soon you’ll have enough credit to be approved for that loan, apartment, or job.

Another common issue is having your credit application denied. This can happen when you have inaccurate information on your credit report, have bad credit, or don’t have enough of a credit history. If this happens to you, it’s vital to figure out why you were denied so you can fix the problem. Lenders are required to tell you why they denied you if it was based on your credit report.

The last common problem named by the CFPB is fraud or identity theft. This is when a criminal has used your name, Social Security number, date of birth, or other identifying information to commit an act of fraud. You can protect yourself from this by reviewing your credit report regularly, reporting inaccuracies, and signing up for credit monitoring services.

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