It is a common misconception that most people who do not have a credit score are not worthy of one. The reason for this is people believe that if they do not have one then it means they are doing something wrong. While the card companies say that they do not want you to have one, they are not being completely honest with the whole picture. To be honest they do want people to have a credit score. If you go to their website, they will tell you how important it is. They even say if you don’t have one then it is like being under water. However, if you go to the Federal Trade Commission website you will see that the reason you don’t have a credit score is that your credit card companies are just being dishonest with you. Here are few reasons you may not have a credit score:
1. You haven’t borrowed for at least 2 years
This one is one of the more straightforward ones. Your credit score has a base rate and it builds on that. If you haven’t borrowed in 2 years, then it will take a bit of time to build a base score. Your score will still be an indication of how good your credit is if you do have a secured card and you borrow on it, but it may not be as reliable.
2. You have a few credits cards
Some people just have one or two credit cards and that is all they need. While this is not the best way to keep your score high, it is not the worst. Some people have more than this, which makes it harder to build up a good credit score. When it comes to credit cards people tend to want more than one so they can build up their credit history. If you want to build up your credit history it is a good idea to have one or two secured credit cards. When you are looking for a secured credit card check your local bank. There may be one there that you can get if you qualify.
3. You have little debt
While you can build your score even if you do have little debt, it can be harder. This is because if you are carrying a high balance on any credit card then it can build up a lot of debt. This is because interest is more expensive than paying the card off.
4. You don’t make the minimum payments
If you make the minimum payments on a credit card, then that is not the best thing to do. The good thing about this is that you will not have to worry about how much you have to pay if you are not in a position to do it. You can focus on improving your credit score instead of making small payments on the minimum credit card balance.
5. You have very bad credit
Bad credit can mean a lot of things, but if you are in this situation then you may be in a very bad place. Bad credit can be difficult to recover from, especially if you have debts and a job that is not paying you.
6. You are in prison
Many people are wrongly assumed to have a bad credit score because they are in prison. This is not the case and they are not to blame. It is not fair, but this is how it is. If you are in prison, then your credit will be higher than it would be for a normal person. You don’t have to be in a prison to have a bad credit score, but it can be harder for you to make ends meet. This is because not everyone in the prison is employed. This means that they do not have money to spend. This means that they will try to borrow money from you.
7. You have very bad luck
This is one of the more bizarre ones, but it is not without merit. This is because it seems like people who are in debt get into more debt. When someone applies for a credit card, they assume that they will not have any problems and this is often not true.
8. You live with family
If you have family members who are more financially dependent then they will be more likely to lend you money and give you a credit card. This is not something to worry about, but make sure you are not paying them off too much.
9. You use a Payday Loan
There is no guarantee that the next Payday Loan you are offered is going to be any better than the one you took out before. This is because you cannot control the company that gives you a loan.
10. You had a baby
Having a baby does not change a person’s credit score. That said, it can have a serious impact. They may not be able to get credit for a long time and will find it very difficult to get a credit card because they have an extra expense.
11. You are buying a car
This is a very dangerous situation and you should never let yourself get into this position. You can guarantee that it is going to be much harder to find a credit card that you can afford, and even if you do, you will pay more interest because you have had to pay a deposit. If you have a job and you want to buy a car it is fine. However, if you don’t have a job and you want a new car then this is going to be very difficult to do. There is no guarantee that you can find a credit car that will be as cheap as it would be to buy one outright.
12. You don’t have a car
You need to be able to have a good credit score so that you can get a car loan for a car. That way you can get a car that you can use for work and to make money to pay your bills. You can’t go out and buy a car if you have bad credit. The car companies will find out and refuse to work with you if you have bad credit. You have to pay for it if you want it. If you are considering buying a new car, check your credit score first before you do. Also check the loan interest rates you qualify for.
13. You had your identity stolen
This one really isn’t a good reason, but the credit card companies don’t want you to have credit because they are afraid someone will steal your identity and go bankrupt. If you are not planning on using your credit cards and have a regular bank account then you should have no problems with your credit. If you can clear up the damage done then you can get a loan with a good interest rate.
14. You can’t pay your bills on time
This is one of the most common reasons that people do not have a credit score. If you can’t pay your credit cards on time then it is very hard to have a good credit score. This is especially true when you are carrying a lot of debt. It is best to pay your credit cards off on time each month. If you can’t pay them off on time then there is a chance you will be put into collections. Then you may not be able to keep a good credit score.
15. You are in bankruptcy
If you are facing bankruptcy then this is a reason why you don’t have a credit score. You may also have a no credit order. You can get this if you have not used credit since 2005. While bankruptcy may be a good thing for some people, it is a negative thing if you are trying to get a loan. You also have to tell the credit bureaus about your bankruptcy.
16. Your income has gone down
It can be quite frustrating when your income has gone down. While it is tough for some people, it is best to find a job to improve your income. Once you have a job then you can improve your credit score. You can talk to a career advisor about this.
17. You have no payment history
Without a payment history it is very hard to get a credit score. This is because you cannot build a good credit score by making one payment each month. This is also the case if you have multiple payments on one credit card. This is because the credit bureaus see a pattern.
18. You are in a tight place
While everyone will have times when they struggle to make ends meet, these are the times when it is most important to manage your money well. If you have a credit card and you are paying it off you are on the right track.
19. You are still applying for jobs
Job hunting can be difficult at the best of times, but it is even more difficult when you don’t have a credit card. There is no guarantee that any of the jobs you apply for will be willing to give you credit. If you want to try to get one, then you need to apply using this method.
20. You have a low credit limit
This is one of the easiest credit score fixes that you can do. If you have a credit limit that is not enough to get you out of debt, then you should get it raised. If you can get the credit card company to increase your limit, you will not have to worry about paying the card off. That will help you get out of debt more quickly.
21. You are carrying high balances
When you are carrying high balances on a credit card then that is not a good thing. Even if you pay the minimum payment each month, this is not a good thing for your credit score. Your APR will be so high that you will be paying a lot of interest and that is not good for your credit score.
22. You are over your limit
The very last reason why you do not have a good credit score is if you are using more than you can pay on your credit card. You are looking at getting a high APR when you apply for a loan. If you do have an interest rate above 10 percent then your credit score will suffer. You don’t want to have a high balance on your credit card. The only reason you should have a credit limit of more than 10 percent is if you are able to pay off the balance each month. If you are in bad credit then this may not be the best time to take out a credit card.
Wrapping – Up!
If you have a short period of bad credit history then you can still fix it up. You can try the tips listed above to build up a good credit score. You will be surprised how quickly you can get one when you work on your credit. Many of these reasons can be explained with these facts:
- If you live with family, then you can ask your family to put some money towards your credit cards.
- When you apply for a credit card you do not have to pay the minimum payment every month.
- Paying off debt slowly will make it easier to repair your credit.
- You can find out your credit score by calling your bank.
It is not that your credit score is bad, but rather you are not using it as much as you should be. Credit scores have a lot of impact on your life and for many people is the first step to getting a loan or obtaining a mortgage. There are lots of things you can do to try and improve your credit, but it is important that you are aware of your credit score and that you use it to your advantage. Using the above tips can help you to create a credit score that is more representative of your true ability to repay loans.