Do you have to have good credit t invest in the stock market?

Question

To be a day trader, an online investor, or a conservative investor? Basically for a broker to do buisiness with you do you need good credit ?

Answer 1

your credit rating really doesn't enter into this because your not buying anything on credit. when you buy stocks or mutual funds you pay up front. most stocks and funds can be bought directly from the fund or company without having to deal with a broker. if your going to day trade or do options you can use like charles schawb or someone like that. they will make you set up like a savings account before you can start trading like 5 or 10 thousand. this account will be used to cover all your trades and you will probally need to keep a mininum balance of whatever they tell you. if you don't keep track and you try to make a trade and theirs not enough in acct. to cover trade they probally won't make the trade. for you until you put more money into your acct.

Answer 2

No you don't need a bad / good credit score to trade on the market.  Most places like Scottrade tie into your bank account, not credit card.  You deposit money and buy/sell stock using the money that was put into the account.

Answer 3

Thank goodness they don't check your credit score, because you're buying with your own money.

Answer 4

It depends on the broker and the type of account you have.  When you sign an account agreement you authorize the broker to check your credit.  Will they, maybe.  Can they, yes!  

If you have a cash account, you are putting the money up before you buy.  Since the broker is not at risk, they are less likely to check your credit.

If you have a margin account, you will be able to purchase stock with borrowed money.  The broker is at risk in a margin account.  He may want to be sure you are financially able to handle the risk that comes with trading on margin.   Will he tell you when he checks your credit?  Probably not unless you ask.

For the three you mentioned:  

A day trader is more likely to have a credit check made.  Because the day trader must have a margin account and (some believe) is engaging is riskier trading practices.

Online investor:  not relevant

Conservative investor:   Probably a cash account and credit check less likely.  

Note:  If you open an account...READ the agreements you sign and any other documentation provided.

Answer 5

Investing in stock market has nothing to do with your Fico Score. To work with brokers, you need the funds to invest. They don't check your credit history:)

Answer 6

If credit was a factor to my success as a day trader I would never have started. I started with creditors breathing done my neck and now they are begging me to use their services!