Even if you have no credit history, you can start building a good credit score.

If you’re a Minnesota resident who has had little experience with loans or credit cards, you may be surprised by how difficult it is to get credit. Why would you be denied? It’s not likely you have bad credit. However, as far as lenders are concerned, having no credit is almost as much of a risk factor as having bad credit.

You may be a very responsible Minnesotan who pays every bill on time. Yet, unless you have a history of credit use that has been reported to the credit bureaus, lenders have nothing to go on. As far as they’re concerned, you’re a credit ghost. The good news is that alternative credit scoring models are now being tested. These models factor in things like cell phone and utility bills, and they may make it easier for Minnesota consumers with no credit history to get access to loans and credit cards.

How Alternative Credit Scoring Models May Help Minnesota Consumers with No Credit History

It does seem unfair that a lot of Minnesota consumers have been paying their rent and utility bills for years while getting no credit for being responsible. So, with the belief that factoring different types of payment activity into credit scores would open credit opportunities up to more consumers, the Consumer Financial Protection Bureau (CFPB) started their investigation. The consumer watchdog organization wanted feedback from both consumers and the credit industry about the pros and cons of alternative credit scoring models.

A few companies have developed credit scoring models that take alternative data into consideration. For example, FICO recently introduced the FICO Score XD. This credit score factors in variables like cell phone and cable payments. TransUnion also offers an alternative data driven credit score called CreditVisionLock. This credit scoring model uses unconventional data such as checking account histories and frequency of address changes when calculating creditworthiness.

Some Minnesota consumers with little to no credit history may be concerned about privacy issues when it comes to using alternative data. This issue has also been raised by numerous consumer advocates. The CFPB wants consumers to know that it shares these concerns. Therefore, the Bureau has sought the the most secure ways to take advantage of alternative data.

Why Minnesota Consumers who are New to Credit should Keep Tabs on their Credit Reports

Minnesotans who’ve never taken out loans or used credit cards may be unfamiliar with the practice of checking their credit reports. However, once you start using credit, keeping tabs on your credit reports is an important action to take. Looking at the information contained in your credit reports will help you to understand your credit score. It will also allow you to look for signs of identity theft and find errors on your credit reports that might be unnecessarily hurting your credit score.

You might assume that your credit report is the same regardless of where it comes from. Yet, credit reports from TransUnion, Equifax, and Experian (the three major credit bureaus) are typically different. This is because each credit bureau receives different information. Some lenders and credit card issuers report to only one bureau, and the credit bureaus usually don’t share information. So you’ll want to request one from each of the three credit bureaus.

The Fair and Accurate Credit Transactions Act (FACTA) allows you to request one free copy of your credit report from each of the major credit bureaus. You may do this every 12 months. The easiest way to pull all three credit reports at once is to visit www.annualcreditreport.com and fill out the online form that is provided. This website is absolutely secure and authorized by federal law.

The Free and Legal way to Get Better Credit

Consumers in Minnesota who find inaccuracies on their credit reports should dispute these errors immediately. After writing, mail dispute letters to the appropriate credit bureau(s) along with supporting documents. Any consumer who wants to simplify the disputing process can get help from a FREE credit repair lawyer from Credit Repair Lawyers of America.

Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? The law allows us to collect our fees and costs from the defendants in any successful action.  This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (888)293-2882 or sending him a message through our contact page.