No credit means no credit score. That means you have no credit report, which in turn means that you have no recent experience with loans or lines of credit. You may never have borrowed money from a lender that reports to the credit bureaus, which store information about your credit history. Or, you have not done so in the past 7-10 years.
Having no credit score also means that you don’t have any financial red flags, such as collections accounts, that would appear on a credit report and count against you. That’s what separates people with no credit from having bad credit. On that note, “no credit score” isn’t the same thing as having the lowest possible credit score (300). You simply don’t have a score yet. And when you start building credit, your first credit score will depend on your initial performance, particularly your ability to pay the bills by the due date.
Here’s what it means to have no credit score:
- You have never borrowed money from a lender who reports information to the credit bureaus, or have not done so in the past 7-10 years.
- You have not recently applied for a credit card or other type of loan. Doing so puts a “hard inquiry” on your credit report and will lead to you having a credit score.
- There aren’t any negatives in your financial life that might appear on a credit report. For example, you don’t have any accounts in collections.
- You don’t have the lowest possible credit score (300). You have no score at all.
- It’s possible to go from no credit score to having a credit score in as little as one month.
- Your first credit score could be 300 to 700+, depending on how you manage bill payments early on.
Having no credit score can make it more difficult to get a loan, an apartment or even a job in the future. That’s why it’s good to begin building your credit as soon as possible. Start with a secured credit card if you have to, and make sure you pay on time every month. You’ll be on your way to a good credit score in no time.
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