Is It Bad to Have No Credit Score?

Quick Answer

Having no credit score can make it difficult to pursue many goals, such as getting an auto loan or credit card, or qualifying for an apartment or mortgage.
It’s considered worse to have a bad credit score than no credit score, as a bad credit score takes longer to fix.
You can establish credit by becoming an authorized user on someone else’s credit card, opening a secured card or getting a credit-builder loan.

A young man wearing a gray shirt has his hand to his head and his journal on the table while he looks at his laptop screen.

Having no credit score isn't ideal, as it can make it harder to get a loan or credit card, rent an apartment and sign up for utilities without paying a deposit. But it can be easy to fix. You can establish a credit score within six months by utilizing strategies like getting a secured credit credit card or credit-builder loan. That makes a lack of credit less problematic than having bad credit, which can take years to repair.

Here's how having no credit score will affect you, and the steps to take to build credit history from scratch.

What It Means to Have No Credit Score

When you have no credit score, you either lack credit accounts or haven't used credit in a while, which means there's no credit report from which to calculate a credit score. According to FICO's credit scoring models, you need to have at least one credit account that's at least six months old and credit activity within the previous six months in order to generate a credit score. The VantageScore^® credit scoring model requires just one month of activity on a credit account.

Having no credit accounts, and thus no credit score, is called credit invisibility. It's common among young adults who don't yet have loans or credit cards, older individuals who haven't recently had credit in their own names and recent immigrants. You're credit invisible if there's no credit report in your name from which to calculate a credit score.

You could also be considered unscorable if you have credit reports but they don't include activity from the past six months. This may occur among retirees who have paid off their mortgages and other debts, and have no open loans or active credit cards for an extended stretch of time.

Learn more: How to Establish Credit if You're Unscoreable

Downsides of Having No Credit Score

The lack of a credit score can affect your day-to-day life in many ways.

Difficulty Getting Credit

It will be far more complicated to qualify for loans and credit cards without a credit score. Financial institutions use credit history to gauge the likelihood you'll repay your debts as agreed. They also use credit scores to make quick, automated decisions on who to lend to and at what interest rates. When you have no credit score, you may be required to go through manual underwriting, which is when a loan officer personally reviews your financial history to determine your creditworthiness. The process takes longer and is more rigorous than credit-based loan applications.

Issues With Housing Rentals

Many landlords and property management companies check credit scores as part of their tenant-screening processes.

The lack of a credit score isn't grounds for denying you housing. But if there are multiple applicants for the same unit, it's possible that someone with a good credit score will be chosen over an applicant with no score. Or you may need to pay a higher security deposit, add a cosigner or guarantor, apply with a roommate or get references to qualify. That's because landlords may interpret a lack of credit experience as an indicator you could pay rent late.

Higher Security Deposits

Applying for an apartment isn't the only time when the lack of a credit score can result in higher deposit requirements. Cellphone carriers who let you pay off a new phone in installments and cable and internet providers who lease equipment may check your credit and charge you higher security deposits if you're credit invisible. Utility companies like electricity or water providers may do the same.

Is It Worse to Have No Credit or Bad Credit?

It is worse to have bad credit than no credit.

While both have an impact on your ability to get the credit and services you need, it is more straightforward to solve the problem of having no credit. You can apply for particular credit products, which we'll discuss below, to generate payment history. You could see positive results in a matter of months.

A bad credit score, on the other hand, will typically take longer to address.

You can make all bill payments on time, limit debt and practice other responsible credit habits going forward, but as long as derogatory marks like bankruptcy, foreclosure or a history of missed payments appear on your credit report, they will have a negative effect.

That impact will lessen over time, and the negative items will typically come off your credit reports in seven or 10 years, depending on the event. But you won't be able to change a bad credit score as quickly as you can change the fact of having no credit.

Learn more: Credit Score Basics: What Impacts Your Score and Why It Matters

How to Build Credit

There are several proven strategies to create credit history and generate a credit score:

Become an authorized user on a friend or relative's credit card. As an authorized user, you receive a credit card in your name, though you won't be legally required to make payments on the account. The account's payment history can help you establish credit reports in your name so a credit score can be calculated.
Get a secured credit card. To get a secured credit card, you make a cash deposit as collateral, and that amount typically serves as your borrowing limit. If your lender reports to all of the credit bureaus (Experian, TransUnion and Equifax), using the card and making timely payments each month can help you establish a positive payment history and show lenders that you know how to use credit responsibly.
Consider a credit-builder loan. With a credit-builder loan, you borrow a small amount—usually up to $1,000—that the lender puts in a savings account. You make payments to the lender for a term of six to 24 months, and at the end of the term, the savings in the account is yours. If the lender reports your account to all three credit bureaus, your payments will establish credit history and create a credit score in your name.
Enroll in Experian Go^™. This free program allows you to take the steps to create your own Experian credit report even if you're credit invisible. Experian Go works in conjunction with Experian Boost^®^ø^®^ø, which can help you become scoreable by adding your history of on-time utility, cellphone and streaming service payments to your Experian credit report.

How Long Does It Take to Establish a Credit Score?

It takes at least six months to establish a FICO^® Score^☉ ^Θ, and a shorter time to establish a VantageScore credit score.

Example: Your first credit card account will appear on your credit report 30 to 60 days after you receive the card. You'll then need to demonstrate up to six months of account activity before a FICO^® Score can be generated. You may have a VantageScore credit score as quickly as one month after the credit card company reports your account activity to the credit bureaus.

Creditors report payment and account activity to the credit bureaus monthly, on their own schedules. As a result, your credit report will update on an ongoing basis to include new information.

One way to see faster results is to sign up for the Experian Go app. It allows you to establish an Experian credit report instantly, and potentially start building credit history right away. It uses Experian Boost to add regular bill payments you've made in the past to your Experian credit report. Experian Go can also help you explore other options for building credit by asking a few questions about your income and finances.

Frequently Asked Questions

What Is the Lowest Credit Score You Can Have?

The lowest possible credit score is 300 in both the FICO and VantageScore basic credit scoring models. The highest score is 850. Any score below 580 is considered a poor credit score, and could lead to trouble qualifying for loans and credit cards and getting affordable interest rates.

Can You Get a Loan With No Credit?

You can get a loan with no credit by undergoing a manual underwriting process. You'll provide the lender with a wide variety of financial documentation that demonstrates your ability to repay the loan. A loan officer will go through it by hand, rather than using an automated algorithmic process, to determine whether you qualify.

Can You Get a Credit Card With No Credit?

You can get a secured credit card with no credit, but not typically a traditional, unsecured card. Since you'll pay a cash deposit to get a secured card, the lender takes on less risk, and is willing to work with you despite your lack of credit history. You can use the card like you would a traditional credit card. Once you show that you make regular, on-time payments, you may be able to upgrade to an unsecured card with the same issuer.

The Bottom Line

Having no credit score is an inconvenience that can make certain activities more burdensome and limit your ability to achieve financial goals. But it is a solvable problem that gives you the exciting opportunity to build a good credit score from the ground up. Understand what affects your credit score and practice responsible credit habits so you can enjoy the benefits of a strong score for a lifetime.

How Good Is Your Credit Score?

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Is It Bad to Have No Credit Score?

In this article:

What It Means to Have No Credit Score

Downsides of Having No Credit Score

Difficulty Getting Credit

Issues With Housing Rentals

Higher Security Deposits

Is It Worse to Have No Credit or Bad Credit?

How to Build Credit

How Long Does It Take to Establish a Credit Score?

Frequently Asked Questions

What Is the Lowest Credit Score You Can Have?

Can You Get a Loan With No Credit?

Can You Get a Credit Card With No Credit?

The Bottom Line

What Makes a Good FICO^® Score?

How Good Is Your Credit Score?

Resources

Latest Research

Latest Reviews

Credit support

Credit advice

Most popular

Credit reports

Credit scores

Improving credit

Establishing credit

Identity Theft support

Identity Theft Advice

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Identity theft and fraud

Cybersecurity

Privacy

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Digital checking account

Save money on bills

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In this article:

What It Means to Have No Credit Score

Downsides of Having No Credit Score

Difficulty Getting Credit

Issues With Housing Rentals

Higher Security Deposits

Is It Worse to Have No Credit or Bad Credit?

How to Build Credit

How Long Does It Take to Establish a Credit Score?

Frequently Asked Questions

What Is the Lowest Credit Score You Can Have?

Can You Get a Loan With No Credit?

Can You Get a Credit Card With No Credit?

The Bottom Line

What Makes a Good FICO® Score?

How Good Is Your Credit Score?

Resources

Latest Research

Latest Reviews

What Makes a Good FICO^® Score?