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What is Your Credit Score If You Never Had Credit?

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What is your credit score if you never had credit? To answer this question first we will have to talk about credit score and credit invisibility. No financial organization or bank wants to provide credit to any individual who does not have any credit history. However, this does not mean that the individual has a zero credit score or a zero credit rating. In this scenario, the person will simply be credit invisible.

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What is the meaning behind no credit history?

A credit score of any individual statistically represents their chances of repaying their debts. The credit bureaus of respective countries collect financial information on different individuals and create a report for each individual. These financial reports state how these individuals have managed their past debts. Banks and credit card companies make use of this information to generate your credit score before approving your loan or credit.

If you do not have any credit history that does not mean that you have not paid any bills, it is just that your transactions have not been recorded or sent to the credit bureaus or credit reporting agencies. Your credit history might not exist because you prefer using cash instead of using credit cards to pay your bills or if you never possessed a credit card in your lifetime. 

More importantly, you also need to understand that if you do not have any credit history, it does not signify that you are financially irresponsible. It simply indicates that you have not used any kind of monetary product that can assist you in developing your credit score. You also need to remember that if you are using credit cards and paying your bill on time, it takes a while to reflect on your credit report.

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The reasons why you don’t possess any credit score

Practically it is impossible to have zero as your credit score no matter how badly you have previously handled your credit bills and debts. 

Some possible reasons why you don’t have any credit score:

  • You do not have a credit card or credit account.
  • In the last six months, you have not made any transactions using your credit card.
  • You applied for a credit card very recently.

What is a good credit score in UAE?

In the UAE, your credit report and credit scores are handled by Al Etihad Credit Bureau. If your credit score is more than 700 then it is considered a good credit score and it will also help you approve a loan or a new credit card. More importantly, with a good credit score, you will receive lower interest rates and higher loan amounts very easily.

The general credit score range in UAE is:

  • Score range 300 to 619 - Bad Credit Score
  • Score range 620 to 679 - Fair Credit Score
  • Score range 680 to 730 - Good Credit Score
  • Score range 731 and above - Excellent Credit Score

How to check your credit score in UAE?

If you want to check your credit score in UAE, then you should log on to the website of AECB. You can download your credit report by paying a minimal fee of AED 84 (plus VAT) directly from the AECB website. You can also check out third-party websites where you can receive the same by paying AED 157.5 (plus VAT).

How to quickly build your credit score from scratch?

If your credit report is not enough to reflect your credit score, then you should try to construct your credit history from scratch. Although this entire process can a challenging, you can refer to the following tips that will help you efficiently build your credit score:

  • Use a secured credit card: Although secured credit cards ask for a cash deposit as your collateral at the same time they can help you effectively boost your credit score. Moreover, these particular types of credit cards come with multiple rewards and you don’t need to pay any annual fee for the same. 
  • Pay bills on time: Your payment history is extremely important in building a good credit score. That is why always make sure that your home loans, student loans, credit card bills, auto loans, etc. are paid on time.

To conclude

What is your credit score if you never had credit? By this time, you must have received the answer to this question but remember that there is nothing wrong with having no credit history, and in fact, it is a chance for you to start over. Although you do not have any credit history, at the same time you have not made any significant mistakes that can potentially damage your credit score and credit report for a long time. 

More importantly, also remember that credit scores cannot be built in just a day. It takes at least six months to build a good credit report (depending on how frequently you have used your credit cards). If you want your credit score to be higher then it will take more time. Remember that perseverance is the key to getting the best credit score.

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