What Does It Mean When You Have No Credit Score?

Should you have ever applied for a credit card or a loan, you most likely came across the term "credit score." Lenders evaluate your credit score to decide whether or not lending money to you would be riskwise. A high credit score indicates that you are a low-risk borrower; a low credit score indicates that you might not be able to pay back your loans. What if, however, you lack a credit score? This can occur whether you have never borrowed money before or if you have opted not to utilize credit products. If this describes your circumstances, relax; here is what it implies and what you can do about it.

Why You Don’t Have a Credit Score

Not a single credit score exists for millions of Americans. Among them, you could be one. And you most likely have questions about why. The thing is that Credit scores apply to more than simply loan candidates. Employers, landlords, and insurance firms also find use for them. You are therefore passing up significant chances if you are not using credit. Still, relax!

There are plenty of ways to build your credit without taking on debt.

Over the past seven years, you have not sought a loan.

You might be surprised to find that having a credit score is vital for so many reasons. A decent credit score lets you rent an apartment, negotiate a lower loan interest rate, and even influence your insurance premiums. Sadly, your credit score could be out of current if you haven't sought a loan throughout the past seven years. This indicates that it may not fairly represent your present credit situation, which may affect your eligibility for a new credit card or loan application. Fortunately, even if you haven't borrowed money in some time, there are strategies to raise your credit score.

You are young or fresh from college

Young people or recent college graduates might not have had an opportunity to raise their credit score. This makes sense; after all, you are just beginning your journey in life. Starting early can help you to establish your credit so that, should you need to borrow money for a significant purchase—such as a house or a car—you will be able to obtain the best terms and interest rates.

You have moved to a new country

Among the millions of immigrants who have come to a new nation only to discover their credit score does not transfer? You are not on your alone. Many people find themselves in this position, and it may be aggravating. Fortunately, one can avoid this problem in several ways.

For the past two years, you opened inactive accounts.

Should you have open inactive accounts, that account is regarded as active and will be included in your credit score. Closing any dormant accounts will help to raise your credit score. Closing these inactive accounts shows that you are trying to better your credit history.

Your lenders don’t report any information to any of the three credit bureaus

Three credit bureaus, Equifax, Experian, and TransUnion, are said to exist in the United States. But none of your lenders report any information to any other! Your credit score, then, is built on a somewhat synthetic construct. Your lenders are more concerned with your likelihood of returning their loans than with your credit score—good or negative. Therefore, if you have been having trouble with your credit, relax; it will not compromise your loan application capacity. Just ensure you can show you can pay back the debt!

Over the past six months, you neither sought for nor used credit.

Though you might not know it, your credit score is probably declining. Every month that passes without credit used can reduce your score. This is so because, without a recent history of borrowing money and returning it on schedule, creditors view you as more likely to be problematic. You need not fear though; there are strategies to restore your credit without resorting to loans.

Why Your Business Doesn’t Have a Score

Like most small business owners, you might have never heard of the term "credit score" until a little time back. You might also just faintly know what it is and how it will impact your company even today. Unbelievably, though, that basic three-digit number might significantly affect your capacity to obtain loans, credit cards, or even lease space or equipment. Therefore, if you find yourself bewildered about the credit score of your business, rest assured; that you are not alone.

Get assistance fixing your credit right now by phoning (888) 804-0104!