Credit scores, while still a relatively new concept in the world of finance starting in 1989, are incredibly important today. Your credit score affects any loan or credit card you apply for, but can influence even more than that. Credit scores can be deciding factors in renting an apartment, getting a job, buying a cell phone, and getting a good rate for car insurance. 

If you have a low credit score, or have no credit score, it might feel like the whole world is against you. You can’t build your credit score because nobody is willing to give you credit, and you get the short end of the stick in your life because of it. But having low or no credit is not a life sentence, you do have options to improve your situation.
 

Examine Your Credit Report
 

Before you can start exploring options for your credit score, you should first fully understand your situation. Your credit score is created from your credit reports compiled by the three credit agencies. You can get a free yearly copy of your credit reports from the three agencies: TransUnion, Equifax, and Experian. 

These reports will show any items that influence your credit score or usage of your credit over the past seven to ten years. This includes applying for a credit card, missing a loan payment, hard inquiries into your credit, and sometimes even payments or missed payments on bills and rent. 

If you have low credit, look through the report to find out exactly why. Did you miss some payments, open too many credit cards, or file for bankruptcy? Maybe you did nothing wrong, but are an identity theft victim with incorrect information on your credit report. 

If you need help looking at your credit report and situation, get professional help with it. Pioneer members get free access to financial counselors through GreenPath Financial Wellness. Their counselors can look over your credit report and help you understand what to do next.
 

No Credit? Where to Start Building
 

Having no credit score puts you in a unique predicament. With no credit history, you have no evidence of being trustworthy of having credit. Some lenders won’t give out a loan or credit card to someone with no credit.

There are two major paths to take if you have no credit: find someone to co-sign on your credit card or loan or find a low-risk tool to build your credit designed for people with no credit. If you decide to ask someone to co-sign a credit card or loan, make sure it’s someone you trust and that they understand the significance of co-signing. If you default or fail to pay off your debt, it will fall to them to cover it. Co-signing will get you access to financial tools to make large purchases, like buying a car or getting a high balance credit card.

If you choose to build your credit using a tool, you have a couple of options. Some financial institutions offer debit cards that report to the credit agencies. You could also get a low balance credit card and be extra careful with it. Another method is using Pioneer’s First Time Auto Buyer loan, which is great for people with no credit and have never purchased a car before. 
 

Credit Repair to Boost Your Score
 

If you have low credit, pursuing credit repair on your credit reports could be a viable path to take. You can have corrections made to your credit report if your credit card got stolen, were the victim of identity theft, or there are inaccurate items on your report. 

Getting those negative items removed will raise your score, often a significant amount. You can repair your credit yourself by reporting errors to the credit agencies, or use a service to do so. 

Credit repair works if there are inaccuracies on your report, but if there aren’t any, it is not the right route to take to improve your score. If nothing is incorrect on your report and the negative items are your fault, it’s not worth pursuing or paying for.
 

Open a Credit Card if You Don’t Have One
 

A major impact on your credit score is having an active source of credit and how long you’ve had it. By having an active source of credit, like a credit card, it shows you are responsibly using your credit and paying it off month after month. Alongside that, having an open source for a long time positively impacts your score.

So, if you don’t have a credit card, open one and use it very carefully. Every month, put a few cheap items on it you know you can pay off. Then, pay off the credit card. This activity will show up as a positive item on your credit report, raising your score slowly each month.

Never close this first credit card. Even if you get a better credit card later with a lower interest rate, leave the card open. Having a long-term open line of credit helps your credit score, even if you don’t regularly use it. Just be sure to pull the card out and use it on occasion, just to make sure it doesn’t get closed by the lender.
 

Ask for Landlords or Utility Companies to Report on Positive Actions
 

Often, when paying bills or rent, those companies will only report to the credit agencies if you miss a payment. You could pay on time and in full for years with nothing being reported to the credit agencies, but missing one payment and they send it over.

Some utility companies and landlords have the option to send over positive payments if you request it to the credit agencies. There are also external services you can enroll for that will report making rent and utility payments on time for a small fee. 

Alone, these positive actions won’t raise your credit quickly, but every little bit helps. Couple this with other actions and within a few years, you could get to a good credit score.
 

Open a Credit Builder Loan
 

If you have low or no credit, there is a tool available to build your credit. Pioneer offers a Credit Builder Loan, which is a useful way to build your credit score and add positive items to your credit report.

How it works is that you apply for a loan from Pioneer, who loans you the money but then uses the loan as collateral while you repay it. Then, every month, you make payments on the loan which then gets reported to the three credit agencies. Loan funds are deposited into a Pioneer Savings account where you earn dividends on it. Once the loan is fully paid off, the money becomes available in your account. Not only do you build your credit, you also save money!

Open a Credit Builder Loan