Got your utilities, rental, cell phone, etc.. in someone else’s name? Not Good for Credit.

We all know that no credit is better than bad credit. But have you tried getting a loan lately with no credit? Or have you tried getting a loan while your bills and rental is in somebody else’s name? Well, I will be the first to tell you that it’s extremely hard if not impossible to get a loan with the mentioned scenarios.

There are some situations where you might be concerned about acquiring new credit after being burned, because of bankruptcy and divorce. Maybe you are young and need to establish credit. And finally there are those who just have everything, such as lease agreements, cell phones, car loans, and utility bills in somebody else’s name. Let’s face it, you need credit and that credit needs to be in your name.

It will initially cost you money to get the electric, cell phone, and rental etc… in your own name especially if you have bad credit or no credit. Most utility companies and cell phone companies may require a large deposit initially. But it’s a part of establishing credit.

Now keep in mind that none of these services report to your credit report unless you don’t pay them and they go to collection. When I say establishing credit, I am talking about alternate lines of credit to get a mortgage loan. Example, if you are trying to get a FHA loan and have no credit, you can use one of the mentioned services as an alternate line of credit for government loans as long as the bill is in your own name and the payment history is on-time. Government loans allow you to get a letter from one of these companies stating you have been on time for the last 12 months with payments. This is considered what is called an “alternate line of credit.” Now there is one issue, you must have credit scores to get a loan in this current market. This requirement is with banks, not FHA or VA.

So let’s recap here. If you had issues in the past with credit, get re-established. It’s a must to get loans in today’s lending market. If you are young and you have zero credit, go here. If all your bills are in someone else’s name, get them in your name. Having no credit or credit in somebody else’s name does not help your credit, it actually hurts it.

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