Is It Possible to Have No Credit Score?

Financing can be easier or less expensive when you have a high credit score – buying a home, renting an apartment, getting a phone, buying a car, getting a credit card. But no one is born with a credit score, and millions of Americans don’t have one. There’s even a name for it: credit invisibility. Why are some people scored, but others unscored? And how can you get a credit score if you want one?

Credit invisibility is a classic “Catch-22.” You need to have a history of borrowing and repaying money to be included in the systems of the credit bureaus and scoring agencies that serve banks, credit card companies, and other businesses. But if you try to borrow without a credit score, you’re likely to be denied. And that means you remain invisible, with no credit history and no credit score.

The reasons for credit invisibility vary. Some individuals have no information on file with the credit bureaus, while others have a file that the bureaus consider “thin” or “stale.” Some people have no credit score because they’re very young and never had much chance to use credit. Others haven’t used credit for a few years. And yet others make a deliberate choice to live debt free, relying on cash or other unscored means such as checks, debit cards, and prepaid credit cards.

Of course, you can live without a credit score; it’s not oxygen. And credit reports and scores are not always easy to live with. It’s important to monitor them, and sometimes you may have to dispute errors you find. In fact, consumers submit more complaints to the CFPB about inaccurate information on their credit and consumer reports than about any other problem.¹

But having no credit score can be as challenging as having a poor credit score, with downsides including:

• Your car insurance premiums could be higher.²
• You may find it difficult to take out certain credit cards.³
• You may find it difficult to get a car loan.⁴
• You may have a harder time getting approved for a mortgage.
• Your interest rate may be higher for certain credit cards and loans.⁵

These are some of the reasons that credit-invisible Americans get themselves set up with credit reports and credit scores.  

How do they do it?

You don’t usually have a credit report in your name until you get a credit card, personal loan, or some other traditional form of credit. The lender informs one or more credit bureaus of your new account, and credit scores are calculated by the scoring agencies as you build a track record of payments on that account. But your credit score won’t start at zero, because there’s no such thing as a zero credit score. The lowest score you can have is a 300, but if you make responsible financial decisions from the beginning, your starting credit score is more likely to be between 500 and 700. 

Most often, when someone goes from credit invisible to visible, it’s a younger person getting their first credit card, often with a parent. But it could also be an older person who paid off their debts long ago and hasn’t borrowed money in a while, or someone who has had financial difficulties in the past.

Here are three typical ways people begin to establish a credit history:

• Applying for credit jointly, with a cosigner.
• Becoming an authorized user, also known as an additional card member, on someone else’s account.
• Signing up for a store card at a favorite retailer, where it may be easier to get approved.