Here’s a surprise for you: “is no credit history bad?” Actually… sometimes, yeah. But not in the way most people fear. I know the credit world makes it sound like having no history is the same as having terrible history—but that’s just not true. Still, try renting an apartment with zero credit. Or getting approved for a cell phone plan. Or borrowing money when your car croaks in the middle of winter. Life tends to ask for your credit report before offering you options. And if that report is blank? Oof.
Why Having No Credit Feels Like a Scarlet Letter
Look, I get it. You’ve avoided debt, never missed a payment (because you’ve never made one), and suddenly the world treats you like you’re financially radioactive.
“But I’m responsible!” you think. Great! That responsibility just hasn’t been recorded yet. Credit history is how lenders, landlords, and sometimes even employers judge whether you’re worth rolling the dice on. When your report is a ghost town, they assume the worst because… well, they don’t know you. And they’re not in the business of guessing your character based on vibes.
Is No Credit History Bad? When It Can Actually Hurt You
Let’s get one thing straight: no credit history doesn’t mean bad credit. It’s just invisible. But that invisibility can cost you:
- Higher interest rates – If you can get approved for a loan or credit card, it might come with ridiculous APRs, because you’re an “unknown risk.”
- Rental rejections – Landlords want to know you pay on time. No history? Some will pass, others might demand a larger deposit.
- Getting a car – Leasing or financing a vehicle often requires a credit check. No score = no wheels in some cases.
I remember talking to a Navy vet named Jason—solid guy, never carried debt. Always paid rent by check, refused credit cards like they had cooties. At 38, he applied for a mortgage and got flat-out rejected. Not because he had financial baggage—but because he was a credit blank slate. “I’ve done everything right,” he told me, “and it’s like I’m being punished for it.”
That’s when I told him what I’m going to tell you now: You don’t need a perfect credit score. You need a credit score.
The Fastest Ways to Build Credit From Scratch
You don’t need to dive into debt just to build credit—but you do need to use credit lightly and smartly. Here’s how I’ve seen folks get started:
1. Get a Secured Credit Card
This is basically a credit card backed by your own deposit. You give $300 to the bank, they give you a $300 limit. Use it for gas or groceries, pay it off in full every month, and boom—you’ve got a credit trail. Most report to all three bureaus, which matters.
2. Become an Authorized User
Have a friend or family member with a super clean credit card history? Ask if they’ll add you as an authorized user. You don’t even have to use the card. Their good habits can help your credit profile bloom, like piggybacking their trustworthiness.
3. Use Rent or Utility Reporting
Services now exist (some free, some not) that report your rent or utility payments to credit bureaus. For example, Credit Karma can help you find these tools. Just be sure the one you pick reports to more than one bureau.
4. Open a Credit-Builder Loan
This sounds counterintuitive, but hear me out: A credit-builder loan isn’t about getting money today—it’s you paying them every month, and then you get the money at the end. More importantly, your payments are reported.
Real Talk: Why Everyone’s Pushing for a Perfect Score (And Why You Don’t Need One)
We live in a world where a perfect 850 is some sort of financial flex. But most approvals? They don’t need that. A score in the high 600s or low 700s opens most doors. Focus on being consistent, not a unicorn.
Also, don’t fall for every shiny debt relief promise you see on TikTok or late-night TV. If you’re itching to fix money issues while protecting your sanity, check out The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line. Some of these outfits look legit, until they ghost you (and your wallet).
A Big Misstep: Avoiding Credit Forever
I once had a woman email me who hadn’t touched a credit product in 15 years. Paid everything with a debit card. “I don’t need credit,” she told me, “I pay cash for everything.” But now her identity had been stolen, and she had no credit history to help prove what was hers. No credit can make it harder to defend your actual self.
Plus, debit cards don’t offer the fraud protection credit cards do. Ever tried getting your money back from a shady debit card charge? It’s a nightmare compared to a quick credit card dispute.
A Book I Wish Everyone Would Read First
Here’s a book I wrote that I think will help: Eliminate Your Debt Like a Pro. It’s got battle-tested strategies to pay off debt without wrecking your life (or your last nerve). Simple advice without the shame spiral.
What People Also Ask…
Does Having No Credit Hurt Your Score?
If you have no credit, you usually don’t have a score at all. The bureaus can’t calculate a FICO or VantageScore without at least one account that’s been open for a few months. So it’s not that your score is bad—it’s that it’s missing from the party entirely.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
Is It Better to Have No Credit or Bad Credit?
Tough one. Bad credit at least gives lenders some info—not great info, but something. No credit means they’re flying blind. Either way, both situations need repair. The difference is, building from nothing is often easier than fighting back from rock bottom. At least you’re not dragging past mistakes behind you.
Should I Open a Credit Card Just to Build Credit?
If you’re responsible and can pay it off in full each month, then yes. Credit cards are one of the fastest ways to develop a credit file. Just don’t open five at once or max them out. Keep usage low and live your life like the balance is 10x bigger than it is.
You’re Not Broken—The System Just Isn’t Built for You (Yet)
If you’re sitting here thinking, “I’ve done everything right, and I’m still shut out,” please know this: you’re not crazy, and you’re not failing. The system is rigged in a way that often rewards risk and punishes caution.
But here’s the good news: you can work the system too. Not perfectly, not overnight, and not without a little bit of frustration. But bit by bit? You can tip the odds in your favor.
Credit is just a game with silly rules. Once you learn how to play, you realize you’re not stuck—you were just given the wrong directions.
And if today happens to feel like a punch in the gut, I’ll leave you with something I say often: “There’s no shame in starting over. It just means you’re wise enough now to build it better.”
Need more support? Subscribe to the newsletter or tune into the Get Out of Debt Guy podcast for practical wisdom that doesn’t smell like stale advice. And if you’re thinking about expert guidance, I trust Damon Day. He’s one of the sharpest debt coaches I know (and trust me, I’ve met plenty of nonsense artists). You’re not alone. Let’s get this figured out together.
