What to Do If You Have No Credit Score

If you are struggling to get a mortgage, car loan, or credit card, you are not alone. About one out of every five Americans have no credit score, meaning they are “credit invisible.”

Another term for this hindrance is being “underbanked.” This means because you have no credit report, there is nothing for the banks to refer to regarding your spending habits.

Don’t despair! Microbilt Connect can help you develop an alternative credit score that will put you in the running for all the credit you desire. Keep reading to learn about this awesome free service.  

What Does It Mean to Be Credit Invisible?

Credit invisible is a term that describes a person with no credit history in any of the three major credit bureaus, TransUnion, Experian, or Equifax. Without a credit history, you will struggle to obtain a credit card, mortgage, car loan, or even a lease for housing.

One way to begin building a credit history is to either become an authorized user on someone’s credit card or obtain a secured credit card in your own name. To get this type of credit card you pay a deposit, usually between $200-$300, to begin using it. The deposit provides the lender with security, reducing their risk while you prove you are capable of paying back what you spend.

Once you have a secured credit card for about 12 months and handle it responsibly, the lender will usually allow you to upgrade to an unsecured credit card.

Do I Have a Credit Score?

Your credit score is the numerical representation of your credit history. Without a credit history, you do not have a credit score. This is different than having bad credit, which is the result of poor payment history.

Your credit score is how lenders determine how responsible you are managing money. Your FICO score runs between 300 to 850, and the higher the number the more likely you are to qualify for credit at a lower interest rate.

There are ways you can build your credit score, including having rent payments reported, taking out a credit-builder loan, or using in-store financing to make a purchase. Building an alternative credit score is an excellent way to develop a credit rating, and 90% of lenders are open to this method for determining a borrower's creditworthiness.

Alternative Credit Score

When you have no credit history, obtaining an alternative credit score is an excellent option.

An alternative credit score is when a potential lender considers data such as payments you make on your rent, utilities, and cell phone. Other considerations may be your shopping history and property records. They will also look at your job history, current job, and income to calculate a lending score.

Once you set up an account with an alternative credit company, you need to follow some simple basic rules;

  • Use only a small portion of your credit limit, keeping your balances below 30% of your total limit
  • Pay your bills on time every month, as this has the most significant impact on your score
  • Try to establish a variety of account types, such as installment loans, credit cards, and an auto loan

By combining these habits with your alternative credit score you will build your credit rating and work your way into obtaining easy credit at a good interest rate.

Credit Building When You Have No Credit Score

Credit building when you have no credit score is easy when you join Connect, a non-traditional consumer reporting agency.  If you have a thin or non-existent credit history we can help by providing you with an alternative credit score.

The process is easy, just create your free Microbilt Connect membership account. Link your existing utility, rent, etc. account with your membership, and instantly get your Connect Score.

Want to learn more?