Do I have a credit score if I've never had a credit card?

Yes. No credit is better than bad credit because it is easier to turn no credit into good credit. With no credit, you will also have better credit card options, and it won’t cost you as much overall. Bad credit will make it much harder and more expensive to get a mortgage, auto loan, personal loan or credit card. It could also complicate finding a job or place to live.... read full answer

You can see where, exactly, your credit score falls on the 300-850 scale by checking it for free on WalletHub – if you have a score, that is. If you have absolutely no credit history, you won’t have a credit score because there’s nothing to base one on. But you can get your first credit score within a month of opening your first credit card.

Below, you can learn more about what no credit and bad credit mean, how they compare, and what you can do to improve on either rating.

What “No Credit” Means:

No credit means you have no credit history, or experience as a borrower – not that you have no shot at getting credit. Lenders must be somewhat cautious with unproven applicants, but people starting with a clean slate are at least as likely to manage credit responsibly as they are to abuse the privilege. So, when you have no credit, lenders are more likely to consider your potential than someone with bad credit.

For example, college students are able to get very attractive credit cards despite not having much, if any, credit history because they have high earning potential and lots of financial needs ahead of them, which could make the banks and credit unions offering the cards a lot of money in the long run. And other people with no credit can get a credit card to begin building credit without placing a security deposit.

What “Bad Credit” Means:

Bad credit means you’ve made mistakes as a borrower or otherwise failed to satisfy certain payment obligations. For example, bad credit could be the result of bankruptcy, foreclosure, repossession, defaulting on a loan or line of credit, collections accounts and more.

There’s less guesswork for creditors when it comes to people with a track record of misusing credit because past performance is the best indicator of future results, and they already have some evidence of what kind of borrower you’ll be. You just need to prove them wrong.

Next Steps for People With Bad Credit & No Credit:

Whether you have bad credit or no credit, the solution is pretty much the same. You must add positive information to your major credit reports on a regular basis, to either cover up past mistakes or build out a thin credit file. And that means you need to get a credit card and use it responsibly. All major credit cards report account information to the credit bureaus monthly, and that information will help your score if it shows you’ve paid your bill on time. You don’t even need to make purchases with your card to benefit.

Of course, the credit card options are a bit different for people with bad credit and no credit, respectively. A secured credit card is your best option if you have bad credit, while you should be able to get a decent unsecured starter card if you have no credit.

You learn more from WalletHub’s new to credit and bad credit score guides, but we’ll summarize the biggest differences between these credit categories below.

Compare Bad Credit vs. No Credit:

Whether you have bad credit or no credit, you need a credit card to begin (re)building your standing. And you can’t go wrong with one of WalletHub’s editors’ picks for the best starter credit cards or the best credit cards for bad credit.

There are several ways to raise your credit score in 30 days. Reducing your credit utilization is one of the fastest ways to raise your credit score, and you can do it by paying down debt, spending less, paying your bill more often or asking for a higher spending limit. Disputing negative information on your credit report can help quickly, too. The bottom line is that your credit score can change anytime new information is added to your credit report or old information is removed from it. Creditors typically report updated information about loans and lines of credit at least once a month, so making the right moves for 30 days can definitely produce results for your credit score.... read full answer

But you must understand that true credit building is a multi-year process. You’ll still need to manage your money responsibly moving forward for your credit-score gains to last. And that’s one reason why you should never, ever pay for credit repair. Nonprofit credit counselors can be very helpful, but services that make wild promises and charge fees, especially up front, are best avoided.

Now, with that being said, let’s get back to the business of boosting your credit score by next month. Below, you will find a collection of tips that should help anyone improve their credit score quickly. You can also get personalized advice for how to proceed by checking out your free credit analysis on WalletHub.

7 Ways to Raise Your Credit Score in 30 Days:

1. Dispute Credit-Report Mistakes. Removing negative information from your credit report is perhaps the best way to generate substantial short-term credit-score improvement. But you can remove such information only if it’s wrong or the result of fraud. So go over your report with a fine-tooth comb, cross-referencing each item with your own financial records. If you find something fishy, investigate it further and, if necessary, file a dispute with the credit bureau.
2. Make a Big Debt Payment. How much you owe, especially compared to your income, has a big impact on your credit score because it tells lenders how risky it would be to let you borrow more. A credit score measures your risk to lenders, after all. So the more debt you pay off, the more your score should improve.
3. Reduce Your Credit Card Statement Balance. Credit utilization is calculated by dividing your credit cards’ balances at the end of each billing period by their spending limits. So if you reduce the balance listed on your monthly statement, you also reduce your utilization, which in turn improves your credit score. You can reduce your statement balances by spending less, making larger payments, or paying your bill more frequently. For example, paying a credit card’s bill twice per month – once before your statement is generated and again before the due date – allows you to lower your credit utilization and avoid interest.
4. Become an Authorized User. If a family member has excellent credit, ask him or her to add you as an authorized user on an existing credit card (preferably an old one with a high credit limit and no negative records). This might take too long to process to benefit you in a month’s time. But it should provide a bump pretty quickly.
5. Dispute Negative Authorized-User Records. Not many people know this, but if you are or were an authorized user on an account that is dragging down your credit score, you can ask the credit bureau to remove it from your credit report. Authorized users are not responsible for paying the bill, which means they don’t have to suffer the consequences of not doing so. You just have to file a dispute.
6. Ask for a Higher Credit Limit. More available credit will reduce your overall credit utilization ratio, a key component of your credit score. Be careful, though. Many credit-card issuers will re-check your credit history — causing a hard inquiry and short-term credit-score damage — before approving a higher limit. So make sure to ask about your creditor’s policies first. You should also make sure all your credit limits are expressed accurately on your credit reports. If a listed limit is lower than it should be, ask the issuer to report an updated figure to the credit bureaus. Take note, however, that if you have an “NPSL” credit card, there might not be much you can do about an unusually reported credit limit.
7. Write a Goodwill Letter. If your credit report bears only a minor blemish — one late payment, perhaps — and the rest of your credit history is solid, you can try asking the issuer for a favor. For example, you could call and make a case for why your slip-up should be forgiven and stricken from the record, so to speak. Or you could send an official “Goodwill Adjustment Letter,” which formalizes the request. This tactic is most successful before a negative record actually makes its way to your credit report. But it’s worth a shot afterward as well.

You can keep track of your credit score’s latest developments by signing up for a free WalletHub account. WalletHub is the first and only website to offer free credit scores and full credit reports that are updated on a daily basis. Additional information about increasing your credit score can be found in our comprehensive Credit Improvement Guide.