What to do if you have no credit history

Your credit history has to do with how you’ve managed credit over time. But if you’ve never had a loan or credit card, you might not have a credit history. And that might make it hard to access credit, rent an apartment and more. 

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

What you’ll learn:

• Having no credit history typically means you haven’t had credit accounts that are reported to credit bureaus. 

• Without a credit history, it can be challenging to get credit cards or other loans. 

• Some credit cards and 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 monthly statements on time.

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. And if you don’t have credit history, you probably don’t have a credit report or credit scores either.

Everyone’s financial situation is unique. But here are a few common reasons why someone might have no credit history:

• They don’t have any credit accounts.

• They have credit accounts, but their payments aren’t being reported to the credit bureaus.

• Their credit account is too new.

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 particular credit score to rent their property. Without it, they might deny your application. 

• Jobs: 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.

You might still be able to get a traditional unsecured credit card with no credit history. But if you can’t, here are five other ways to establish credit:

A secured credit card is backed by a security deposit, which is typically refundable. That deposit acts as collateral, which makes secured cards less dependent on credit history and can make them easier to be approved for. You can use a secured credit card like any other card. When you use it responsibly, by doing things like making payments on time, you can establish good credit. And over time, you may be able to upgrade to a traditional, unsecured credit card.

An authorized user is someone who’s added to an established credit card account. Becoming an authorized user on a trusted family member’s or friend’s account could benefit you both if the account is managed responsibly. But negative habits could have the opposite effect.

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. Once the loan is paid off, you get access to the money in the account.

Retail store credit cards usually have more lenient qualifications and manageable credit limits. But make sure your card activity will be reported to the credit bureaus. And keep in mind that retail cards may come with higher interest rates and lower credit limits than other credit cards.

Self-reporting isn’t something you can technically do on your own. It typically means using a third-party service to send information to the credit bureaus that isn’t already being reported. That could include payments for things like rent, cellphone bills or utility bills. If they’re consistently on time, those payments could then positively affect your credit. Make sure you’re aware of any fees and other terms and conditions before you decide to use a third-party reporting service.

Establishing good personal financial habits is key to building credit. Keep these tips in mind:

• Make payments on time to help build a positive payment history.

• Keep your credit utilization low to show you can manage your debt well.

• Create a budget to help you keep spending within your means. 

• Monitor your credit to help track your progress and spot errors that could affect your scores.

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 credit report and scores. 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, you can compare Capital One credit cards to find one that meets your needs. A secured card or student card may be an option.

If you’re new to credit or searching for your next credit card, Capital One can help: 

• See if you’re pre-approved for credit cards without harming your credit scores. 

• If you’re looking to build your credit with responsible use, explore cards for people with fair credit. 

• Earn unlimited 1.5% cash back on every purchase, every day, with a cash back rewards card. 

• Monitor your credit report and score with CreditWise. It’s free for everyone, and using it won’t hurt your credit.