How Experian Go Helps Consumers With No Credit

A credit score opens up new financial possibilities and helps you save money. Lenders will review your credit when you apply for a loan. Unfortunately, not everyone has credit, but Experian Go can help you begin to establish credit.

We’ll discuss how Experian Go helps consumers with no credit and why you should prioritize your credit score.

Experian Free Credit Score

 
Experian Boost is a free service that allows you to add eligible, on-time payments to your credit report, potentially increasing your credit score.

What Are “Credit Invisibles”?

The three major credit bureaus (Experian, TransUnion, and Equifax) collect and hold information about consumers’ financial accounts to create credit reports. Consumers without credit history or credit reports from the national credit bureaus are considered credit invisibles.

According to the Consumer Financial Protection Bureau, 26 million Americans are credit invisibles. The number gets higher if you account for people with limited credit history. Experian stated that nearly 50 million people have limited or nonexistent credit histories. As a result, credit invisibles face restricted access to financial opportunities and higher costs of living. 

Credit invisibility disproportionately affects low-income families. Approximately 30% of low-income families are credit invisible, hurting their chances of advancing to the middle class. Only 4% of high-income households are credit invisible. 

Is Credit Really Important?

Some people wonder if a credit score is essential. Yet, credit scores impact many areas of your finances. These impacts can influence your budget, life decisions, and many things you do. We’ll share why a credit score is vital for your financial health and life. 

Access to Credit Products

Many people want to become homeowners in their lifetimes. Homeownership helps you build equity in your property and escape monthly mortgage and rent payments in the future. While paying down the debt, you’ll be part of a community without a landlord overseeing you.

Most people need financing to afford a home. Lenders will ask for various financial documents, including your credit score. Lenders will weigh each detail, but they heavily consider your credit score. Most loans require a minimum credit score. Most conventional loans typically require a 620 credit score or higher. FHA loans have lower requirements, but you’ll still need a credit score above 500 if you put down 10%.

Not having a credit score severely limits your choices. It can make homeownership feel impossible. You may also need a loan for cars and other high-ticket purchases. Lenders will want to know your credit score before handing out a loan.

Even if you don’t need a loan, you should still get a credit score. Landlords will review credit scores before letting you occupy their units. A low or nonexistent credit score can lead to a rejection or higher rent payments.

Better Approval Rates

Many vital financial instruments don’t get handed out to everyone. Lenders and companies review each applicant’s details before handing out financial instruments. So far, we have discussed mortgages and other loans. A higher credit score will increase your likelihood of landing a loan. In addition, many lenders have minimum credit requirements.

A higher credit score also helps you obtain a credit card. Credit card companies look at several factors, including income and credit score, to decide if applicants should receive a credit card. A higher credit score helps you qualify for better terms on credit cards and loans. 

Credit cards help you build credit if you pay them off on time and you can benefit from perks like the ability to earn rewards. Credit cards also come with credit limits that determine the maximum amount you can spend on your card within a billing cycle. A low credit limit can feel restrictive, and credit card companies let you raise them. However, you’ll have to apply for a credit limit increase, and a credit card issuer will check your credit score before providing a credit limit increase. 

Lower Interest Rates

Each time you take out a loan, lenders will set an interest rate. This interest rate helps lenders obtain a return for giving you a loan. The interest rate also impacts how much room you have left in your budget for over expenses. 

Depending on your mortgage loan’s amount, an extra percentage point on your interest can increase monthly payments by over $100. Higher interest rates can strain finances, but a solid credit score can save you from this fate.

Lenders use an applicant’s credit score to assess risk, with higher scores indicating less risk. A credit score indicates an applicant’s ability to manage money. Lenders will often offer lower interest rates to borrowers who have good or excellent credit because they feel more confident about their ability to pay back a loan. Lenders will charge higher rates for low-credit borrowers to recoup some money in case the borrower defaults. 

A credit score can keep you away from payday and title loans. These loans appeal to borrowers with no credit or bad credit. However, they come with ludicrously high interest rates that can cripple your finances. Building up your credit score gives you access to more choices and lower interest rates. 

Better Terms

A high credit score helps you access better loan terms. Some homeowners with exceptional credit and flexibility opt for a 15-year mortgage instead of a 30-year mortgage. The 15-year mortgage costs more per month than the 30-year mortgage, providing significant long-term savings. You’ll owe less interest and can get a more attractive rate. Buyers with low or nonexistent credit scores may not have access to a 15-year mortgage. High credit scores lead to more favorable loan terms and choices.

Experian Free Credit Score

 
Experian Boost is a free service that allows you to add eligible, on-time payments to your credit report, potentially increasing your credit score.

What is Experian Go?

Credit invisibles get denied many financial opportunities because they don’t have credit. Unfortunately, this problem affects too many people, and Experian Go aims to solve this problem.

Experian Go is a free, first-of-its-kind program that helps people with no credit history begin building credit on their terms.

How Does Experian Go Work?

Experian Go allows you to create a free Experian account by simply answering a few questions about your finances and authenticating your identity. After your account is set up, you’ll receive ways that you can begin building credit and tips on responsibly managing your finances.

Here are some of the benefits of using Experian Go.

Receive an Experian Credit Report

Experian Go provides users with a free Experian Credit Report. Reviewing your credit report provides a foundation for building credit and getting a credit score.

Establish Tradelines and a Credit History With Experian Boost

Experian Go establishes tradelines and credit history on your behalf. You can get both set up in a few minutes with Experian Boost. Experian Boost factors in your previous on-time payments for eligible utility, phone and streaming bills. An Experian analysis from a 2021 survey revealed an average starting credit score of near-prime 665 for Experian Boost users.

Get Recommendations for Financial Products

Experian Go will recommend financial products tailored to your unique needs. You can compare various starter credit cards from Experian’s partners.

Where do I Start?

When credit invisibles gain access to credit, they get more favorable loan terms, interest rates, and approvals. A credit score impacts many parts of your finances, which trickle into various life decisions. 

You can head over to Experian’s website and create a free Experian Go account to start building credit on your terms.

Experian

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