Credit history so limited for many Utahns that they are 'credit invisible'

A new study from BadCredit.org found that over 233,000 Utah consumers are “credit invisible,” a term that describes people whose credit history is so limited that they don’t even have a credit score. This means that they have been denied access to financial products, housing or have faced higher costs due to their lack of sufficient credit history.

Those Utahns who are credit invisible often have to make some serious financial sacrifices to get their hands on loans or credit. Nearly one-third of those surveyed said they had to resort to high-interest options because they couldn’t access traditional credit. Some said they had to find a cosigner, make bigger down payments, cut back on spending or delay big purchases. Others said they were stuck with sky-high interest rates or shorter repayment terms.

In the case of emergency, one in three credit-invisible Utahns said they have had to borrow money from loved ones, while one-quarter of respondents said they relied solely on their savings. Some survey participants said they even had to sell their belongings, put off important services or take on second jobs to make ends meet. A small but significant group said they turned to payday loans or cash advances.

“Credit invisibility is a silent struggle that affects millions of Americans, limiting their access to financial opportunities and hindering their ability to build a stable future,” said BadCredit.org Senior Editor Ashley Fricker. “Our study sheds light on this critical issue. We hope that policymakers and financial institutions work together to find solutions that promote financial inclusion and empower those who have been left behind by the traditional credit system.”

Fricker suggested there are several steps consumers can take to begin building “credit visibility.” Those include applying for a secured credit card, obtaining a “credit-builder” loan offered by some banking institutions, not applying for too much credit at once and paying bills on time, every time.