What to do if you don’t have a credit score

You’ve pulled your free credit report, but got a mysterious message along the lines of “we’re sorry, but we were not able to pull your report at this time”. You double-checked and triple-checked the information inputted to make sure the right address was being pulled in… but it’s also possible that you don’t have enough credit history to have a credit score.

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Some of us had the benefit of having a credit card (thanks, mom and dad), paying rent (helpful in certain cases), or taking out loans (bad for net worth, good-ish for credit). These financial transactions essentially alert the credit bureaus of your existence, and are a part of your credit report. If you don’t have a credit score, the easiest and the most immediate action you can take is to get a credit card.

Remember the feeling of interviewing for your first job out of college? Employers wanted to see work experience for entry-level jobs, but how in the world were you supposed to get work experience if you hadn’t had a job? Ridiculous. Unfortunately, getting a credit card is somewhat similar. You can’t get a good credit card without having a good score, and that doesn’t happen unless… well, you get it.

What credit card options are available for people without a credit score?

If you don’t have a credit score, chances are, it’s because there’s just too little credit information on you in existence. You’ve likely never had to take out a student or car loan, and all your daily transactions are typically carried out with cash or your debit card. While there are huge benefits to living a debt-free lifestyle, future you will thank you for working on building up your credit now, unless you never plan on buying a house or car, or doing anything that requires a credit check.

My recommendation? If you don’t have a credit score, you’re not going to be easily approved for any credit cards. Chances are, you should start with a Secured credit card. Credit Karma has a handy list of secured cards which you can browse through. Last that I checked, however, the list did not include the Discover Secured Card, which is one of those rare secured cards that actually offers rewards.

No matter what, you should apply for a card with no annual fee. If you don’t have a credit score, this card will essentially begin your credit history. It takes about 6 months for credit bureaus to gather enough information to calculate a credit score. Pay off your balance in full, every month, and avoid spending more than 20% of your credit limit. 6 months to a year from now, you’ll have a great score and can begin considering non-secured cards.

Even after you switch to a non-secured card, don’t toss away your secured card. You don’t have to use it, but keeping the card open and in good standing will aid your average length of credit history as well as your overall credit utilization. Cultivating a credit history is a long game, so the actions you take now will affect your score in years to come.

Nothing’s permanent! Even if you’ve made mistakes before now, there are always ways to fix a credit situation. Feel free to contact me if you’d like to talk about a specific case (disclaimer: I am not a financial advisor, just a well-read blogger).

Happy credit hunting!

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