What to do if you have no credit history

Your credit history has to do with how you’ve managed credit. But if you’ve never had a loan or credit card, you might not have a credit history. And you may have a hard time accessing credit or doing things like renting an apartment. 

Keep reading to learn what it means to have no credit history and what you can do to build credit. 

Key takeaways

• Having no credit history typically means that you haven’t had credit accounts that are reported to credit bureaus. 
• Without a credit history, it can be challenging to get a credit card or loan. 
• Certain credit cards and loans, including secured cards and credit-builder loans, are designed to help people establish a credit history.
• Building credit with a credit card takes time and responsible use. That means doing things like paying your monthly statement on time every month. 

In general, having no credit history means that the major credit bureaus—Experian®, Equifax® and TransUnion®—have no information in their records about how you’ve managed credit. Because of this, you likely wouldn’t have a credit report. You probably wouldn’t have a credit score either. 

Everyone’s financial situation is unique, but there are a few common reasons why someone might have no credit history. According to the Consumer Financial Protection Bureau (CFPB), it can be the result of things like limited access to credit, lower income and being too young. 

Having no credit might affect your financial goals in several ways: 

• Credit cards and loans: Lenders generally use your credit history to decide whether they will lend you money. Without a history to help lenders determine your creditworthiness, you could be less likely to be approved for a credit card, a personal loan or a mortgage. 
• Housing: A landlord may require a minimum credit score to rent their property. If you have no credit history, they might deny your application. 
• Jobs: Similar to a landlord, an employer may also require a credit check as part of your job application. With no credit history, you could risk not getting the job.

If you want to start building credit, there are options available. If a traditional, unsecured credit card isn’t an option, here are some options to consider:

A secured credit card is one potential way to get a credit card with no credit history. If your credit card application is approved, you would give a credit card issuer a security deposit, which is typically refundable. You can then use a secured credit card like any other card. And by using it responsibly, you can establish good credit.

An authorized user is an additional cardholder with access to an established credit card account. As an authorized user, you may benefit from a trusted and responsible family member’s or friend’s card use. For example, if they make on-time payments—an important factor in calculating credit scores—your credit could benefit. But keep in mind that negative habits could have the opposite effect.

A credit-builder loan is for people who are establishing or building their credit. With a credit-builder loan, a lender sets up an account with a fixed amount of money. You make monthly payments to the lender, which are typically reported to the credit bureaus. After making all of the payments on time, you would get access to the money in the account.

If you frequently shop at a retailer that offers a credit card, it may be worth looking into applying for it. Retail credit cards usually have more lenient qualifications and manageable credit limits. But keep in mind that they may come with higher interest rates than traditional, unsecured credit cards.

Using credit responsibly can help improve your creditworthiness over time. Keep in mind these tips:

• Make every payment on time.
• Keep your credit utilization low.

Creating a budget can help. So can monitoring your credit to track your progress and spot potential errors. You can get free copies of your credit reports by visiting AnnualCreditReport.com. You could also sign up for a free credit monitoring service, like CreditWise from Capital One. CreditWise can help you monitor your TransUnion credit report and VantageScore® 3.0 credit score. Plus, it’s free for everyone to use. 

Having no credit history simply means that you haven’t had credit accounts reported to credit bureaus. But there are ways to establish your credit. And using credit responsibly over time can help you achieve good credit scores. 

If you’re considering a credit card to get started on your credit journey, take a look at Capital One’s credit cards designed to help build credit with responsible use.