Why You May Have No Credit Score or History
When it comes to making large purchases – like a house, a car, or even a big screen TV – most people use financing. This process typically includes a credit check. But what does your credit score look like if you have no credit history?
Credit Score Breakdown
Most lenders use your FICO (Fair Isaac Corporation) score when determining whether they will extend an offer of credit to you. FICO scores (also referred to as credit scores) range from 350 to 850. As indicated by the list below, the higher your FCIO score, the better your credit rating:
- Score between 750 and 850 is considered an excellent rating.
- Score between 660 and 749 is considered a good rating.
- Score between 620 and 659 is considered a fair rating.
- Score between 350 and 619 is considered a poor rating.
However, it is possible that you can have a score of 0, which means that there is not enough information in your file to generate a score.
Your Credit History’s Role
Some people wrongly assume that no credit history is a good thing because there can be no negative marks on your report. However, if you have little or no history, getting financing approval can be difficult.
Because your FICO score is based primarily on how you have used credit in the past, having no credit history leaves you with no score. Without a credit score, lenders do not have an easy formula to determine if you are a risk. Many lenders do not want to take a chance on an unproven applicant.