Categories

Score Advice

How to Qualify for New Credit with No Credit Score

It's the ultimate Catch-22: You can't get credit if you don't have a credit score, but you can't get a credit score if you have no credit. There is some good news, though. While qualifying for new credit without any credit history or credit scores can be difficult, it is not impossible. There are ways to access credit while you are just starting on your credit journey.

What Is a Credit Score?

Understanding what a credit score is, is important because lenders, credit card issuers and car dealers use these scores to decide whether to approve you for a credit card or loan. A credit score is a three-digit number that's calculated by applying a mathematical algorithm to the information in one of your three credit reports, which are generally updated each month. Your credit report includes all the credit accounts you've opened, as well as your payment history with these accounts.

Credit scores fall into a range. While there are many different credit-scoring models, the FICO® Score* is one of the most commonly used. FICO® scores range between 300 and 850. A score of 700 or above is generally considered good, while a score of 800 or above is considered excellent. Most credit scores, however, fall between 600 and 750.

Why Don't I Have a Credit Score?

A person may not have a credit score for many reasons, but usually, it's the result of having a "thin credit file." A thin credit file means having very few—typically four or fewer—credit accounts listed on a credit report. Banks and other lenders can't calculate a credit score from a thin file because there is not enough information in a user's credit history to do so. You might have a thin file if you are young and haven't established any credit, or if you recently moved to the United States from another country.

Another reason you may not have a credit score is that there is not much activity on your credit reports. Maybe you haven't applied for any new credit for a long time, or you have haven't used any of your credit cards in more than six months. Most credit scoring models pay attention to recent or current credit activity, so be sure to use your cards once in a while, even if you're just charging a small amount and paying it off right away. (And remember, debit card activity is not reported on your credit reports.)

Not having a credit score can lock you out of traditional, low-cost credit products and other financial resources. Without these options, many feel that their only choice is to turn to payday loans, car title loans or rent-to-own businesses, which can trap them in a cycle of high-cost debt. Here's the good news: It is possible to be approved for new credit without a credit score.

What Are My Credit Options with No Credit Score?

Credit options for people with no credit score do exist—you just need to know where to look. Here are five options to consider if you need help building your credit:

  • Secured credit cards are credit cards that require you to deposit your own money as collateral for the card. That deposit usually serves as your credit limit. So if you deposit $300, for example, you can spend up to that amount on the card. Secured credit cards might be right for you if you have a limited credit history and are looking to build your credit.
  • Credit builder loans are loans in which the lender holds the total loan amounts in a savings account while you make payments on it. Once you've paid off the credit builder loan, you receive access to the funds.
  • Store credit cards, or retail cards, are credit cards offered by a retailer. Usually, such cards can only be used to buy things at that store. Store credit cards also typically come with a lower credit limit and a higher annual percentage rate than other credit cards.
  • Authorized users can be added to a credit card account, which allows them to use the credit card but not be the primary responsible party for making payments on the account. Becoming an authorized user can help you start building credit, but you need to make sure that creditors report your authorized user account to the credit reporting agencies. You can become an authorized user by asking a family member to add you to their credit card account.
  • Cosigning is when someone, usually a relative or friend, cosigns a loan to help you establish a credit history. The consigner must have strong credit scores, and they are likely able to qualify for better interest rates and credit terms than you would have yourself. Cosigning can have risks, especially if you fail to make payments on the loan, which can affect both of your credit scores as a result.

Experian Boost Can Help

There is a way for you to improve your credit scores by factoring in previously uncounted payments, such as utility and cell phone bills, through a new, free product called Experian Boost.

Through this new opt-in product, consumers can allow Experian to connect to their bank accounts to identify utility and telecom payment history. After a consumer verifies the data and confirms they want it added to their Experian credit file, an updated FICO® Score will be delivered in real time.

Visit experian.com/boost now to register. By signing up for a free Experian membership, you will receive a free credit report and FICO® Score immediately and will be one of the first to experience Experian Boost.

Bottom Line

You have options if you are just starting to build your credit. Being approved is the first step, but managing your credit well is the next and most important step during your lifetime. Credit reports reflect your credit history and help lenders decide if they can trust that you will manage your debts over time. If you don't pay your debts on time, you will lose that trust and your credit score may suffer. Monitor your credit report for free using the Experian Financial Profile tool.


Want to instantly increase your credit score? Experian Boost helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.

This service is completely free and can boost your credit score fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.


Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.

This article was originally published on December 18, 2018, and has been updated.

*Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.

†Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.

How Good Is Your Credit Score?

300 credit score301 credit score302 credit score303 credit score304 credit score305 credit score306 credit score307 credit score308 credit score309 credit score310 credit score311 credit score312 credit score313 credit score314 credit score315 credit score316 credit score317 credit score318 credit score319 credit score320 credit score321 credit score322 credit score323 credit score324 credit score325 credit score326 credit score327 credit score328 credit score329 credit score330 credit score331 credit score332 credit score333 credit score334 credit score335 credit score336 credit score337 credit score338 credit score339 credit score340 credit score341 credit score342 credit score343 credit score344 credit score345 credit score346 credit score347 credit score348 credit score349 credit score350 credit score351 credit score352 credit score353 credit score354 credit score355 credit score356 credit score357 credit score358 credit score359 credit score360 credit score361 credit score362 credit score363 credit score364 credit score365 credit score366 credit score367 credit score368 credit score369 credit score370 credit score371 credit score372 credit score373 credit score374 credit score375 credit score376 credit score377 credit score378 credit score379 credit score380 credit score381 credit score382 credit score383 credit score384 credit score385 credit score386 credit score387 credit score388 credit score389 credit score390 credit score391 credit score392 credit score393 credit score394 credit score395 credit score396 credit score397 credit score398 credit score399 credit score400 credit score401 credit score402 credit score403 credit score404 credit score405 credit score406 credit score407 credit score408 credit score409 credit score410 credit score411 credit score412 credit score413 credit score414 credit score415 credit score416 credit score417 credit score418 credit score419 credit score420 credit score421 credit score422 credit score423 credit score424 credit score425 credit score426 credit score427 credit score428 credit score429 credit score430 credit score431 credit score432 credit score433 credit score434 credit score435 credit score436 credit score437 credit score438 credit score439 credit score440 credit score441 credit score442 credit score443 credit score444 credit score445 credit score446 credit score447 credit score448 credit score449 credit score450 credit score451 credit score452 credit score453 credit score454 credit score455 credit score456 credit score457 credit score458 credit score459 credit score460 credit score461 credit score462 credit score463 credit score464 credit score465 credit score466 credit score467 credit score468 credit score469 credit score470 credit score471 credit score472 credit score473 credit score474 credit score475 credit score476 credit score477 credit score478 credit score479 credit score480 credit score481 credit score482 credit score483 credit score484 credit score485 credit score486 credit score487 credit score488 credit score489 credit score490 credit score491 credit score492 credit score493 credit score494 credit score495 credit score496 credit score497 credit score498 credit score499 credit score500 credit score501 credit score502 credit score503 credit score504 credit score505 credit score506 credit score507 credit score508 credit score509 credit score510 credit score511 credit score512 credit score513 credit score514 credit score515 credit score516 credit score517 credit score518 credit score519 credit score520 credit score521 credit score522 credit score523 credit score524 credit score525 credit score526 credit score527 credit score528 credit score529 credit score530 credit score531 credit score532 credit score533 credit score534 credit score535 credit score536 credit score537 credit score538 credit score539 credit score540 credit score541 credit score542 credit score543 credit score544 credit score545 credit score546 credit score547 credit score548 credit score549 credit score550 credit score551 credit score552 credit score553 credit score554 credit score555 credit score556 credit score557 credit score558 credit score559 credit score560 credit score561 credit score562 credit score563 credit score564 credit score565 credit score566 credit score567 credit score568 credit score569 credit score570 credit score571 credit score572 credit score573 credit score574 credit score575 credit score576 credit score577 credit score578 credit score579 credit score
Resources
Sign up for helpful tips, special offers and more!
You're signed up!
Our system is undergoing maintenance and will be available again soon.