Financial Advice Blog

Three causes of credit invisibility and how to become credit visible

If you’re credit invisible, it can be difficult to be approved by lenders for financial products such as credit cards, mortgages and loans. Read on to find out how to remedy this and build a solid credit history.

Credit invisibility quite literally means that you’re ‘invisible’ to the credit system. You may have never used credit, or you might have very few credit accounts that have been inactive for a long time. When you’re credit invisible, you essentially have no financial track record – this can make it difficult to be approved by lenders for financial products such as credit cards, mortgages and loans.

There are a few causes of credit invisibility, and each one can be remedied so long as you take the appropriate steps. Read on to discover our helpful solutions, for a credit visible future.

New to credit

Everybody starts out with an invisible credit history. Usually, this just means that you’ve never used credit before, which is common amongst young people who haven’t gained financial independence yet.

Many young adults start building their credit history when they pursue higher education, as student loans are reported to credit bureaus. However, there are other ways to build a credit history, without taking out a student loan – young people can easily take steps to get on the electoral roll, or open a current account which they can then link to their credit report. While these won’t show a history of borrowing, they do help to verify your identity, show that you have a place of residence, and have taken proactive steps to keep your money in a secure account.

Non-reporting creditors

Creditors aren’t required to report your information to reference agencies, even if you’re in receipt of credit. So, if you’ve taken out a loan or own a credit card, you may still find yourself affected by credit invisibility.

In the first instance, it’s worth speaking with your creditor in case their failure to report your information is a mistake. If it’s not, you can request that your creditor begin reporting to agencies. While it’s worth a try, this may not do the trick – creditors usually have to pay a large sum of money to start reporting this information.

Instead, focus on taking other steps to become credit visible. Get on the electoral roll and link your current account to your credit reference agency if you haven’t already – you can also ensure that household bills and utilities are put in your name, as these tend to be reported. When shopping around for new credit options in the future, try to choose lenders that do report to credit reference agencies.

Choosing not to borrow

Some people prefer not to borrow money – many religious sectors condemn moral usury, which is the practice of charging interest to profit from another’s misfortune. As a result, there are large numbers of people that may be credit invisible simply because they choose to rely only on the money that they have, or borrow from those who won’t charge them interest, such as friends and family.

If you’re able to maintain a healthy cash flow without borrowing, there’s no reason to pursue credit. However, it’s worth building credit history just in case the worst should happen, and you do need to obtain credit in order to recover from a financial crisis. Again, take the small steps – you could also take out contracts that require you to make regular payments without having to borrow money, such as a monthly mobile phone contract.

Work on the solutions

Being credit invisible can feel stressful, particularly if you hit a financial rough patch. So, it’s better to get on top of it sooner rather than later. Luckily, credit invisibility has many solutions. It’s always best to seek advice if you need support with your finances – you may find that you have access to credit options that are tailored to suit individuals with a limited credit history.

Share this article


More articles

Talk to us, guaranteed value

We’re so confident about creating value for you quickly, that we guarantee it with a 100% money-back guarantee.

Book a complimentary financial strategy session.