Elizabeth writes with a common question: what do you do if you have no credit history? Here's her story.
What would you recommend for a young person who has no credit history, but would like some (without having the long-term hassle of credit cards and credit card debt) because it would make identity verification easier?
I'm a college student trying to get my savings and IRA account (started as custodial accounts when I was 11) switched to my name. However, this company needs some verification of my identity from a third party, even though I showed them my passport, they know my social security number, etc. The traditional way this third party company verifies identity is through credit history, of which I have none (having no credit cards). I could of course, get some statement billed to my permanent address and verify it via fax and paperwork, but I'm wondering if this lack of a credit history will be a problem in the future.
Also, a lack of credit history is inexcusable if you're trying to get an apartment (where they check your credit and references from other landlords). I live in the Bay Area, and won't be getting a house any time soon. How have other people gotten around that in the past?
To make it clear, I do not want a long-term credit card. I can't stress this enough. I have a debit card which works fine and am presently saving towards retirement. I would still like to alleviate future hassle by proving to anonymous bureaucrats that I exist, and am who I say I am.
What about it, readers? Have any of you dealt with this problem in the past? What suggestions can you offer Elizabeth?
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.