According to the Consumer Financial Protection Bureau, 11% of adults in the U.S. have a "thin or stale" credit file, and another 11% don't have a credit score at all. This commonly happens to people who haven't done anything to establish a credit history—especially young adults—or whose credit accounts have remained dormant or closed for several months.
How Credit Scores Are Calculated
Understanding how credit scores are calculated can help you better understand why you don't have a score.
Credit scores are a numerical summary of information in your credit report. The scores are used to gauge your creditworthiness and predict the likelihood that you'll pay your debts on time. Higher credit scores indicate that you're more likely to repay credit obligations based on how you've handled credit in the past.
The information in your credit report is a compilation of your credit accounts, including credit cards, loans, and any negative records such as debt collections or lawsuit judgments.
Reasons You May Not Have a Credit Score
If you've never had any types of credit accounts, then that explains why you don't have a credit score. With no credit history, there is nothing to score. But there are other reasons you may not have a score as well.
If you recently opened your first credit card but only had it for a few months, then it's likely that you won't have a credit score yet. To have a FICO score, you must have at least one account that's been active and reported to the credit bureaus for six months.
If you haven't used any of your credit accounts for several months or even years, then you wouldn't have a credit score, despite having a credit history because all of your accounts have been inactive for so long.
In either scenario, once your account has enough active history, then you'll be able to retrieve a credit score.
It's possible to have a credit score with one bureau and not the others if the account(s) you have open do not report your history to all three credit bureaus.
Establishing a Credit Score
The best way to get a credit score is to establish your credit history by opening and using a credit account. But to get approved for most credit cards and loans, you usually need to first have a credit score since creditors and lenders use it to approve or deny your application. Because of this, getting your first credit card or loan can be difficult. However, there are some options out there that can help you build your credit history.
If you're a college student, you may want to consider getting a student credit card to help build your credit. Many creditors offer cards for college students with less stringent requirements and lower credit limits. You usually just have to prove that you're a student, and you earn your own income.
Retail Store Cards
Retail store credit cards also usually have less stringent credit requirements than regular credit accounts. However, they may also have higher interest rates—and you'll only be able to use the card to make purchases from the retailer that issues it.
Secured credit cards require a deposit as collateral on your account. You can make charges against the amount that you deposit, and you must pay the money back as you would a credit card. You'll build your credit as long as you pay your monthly bill on time. If you default, then you'll likely lose your deposit.
If you can't get your own card and don't want to go the secured route, then consider becoming an authorized user on a friend or relative's existing account. Just keep in mind that both of your credit scores will be impacted by your use of the account.
Once you open one or more accounts, be sure to use them regularly and pay the balance off in full each month to avoid paying interest and avoid getting into debt (and lowering your credit score). After about six months, you should have a credit score and report under your name.
Monitoring Your Credit
Once you establish some credit, be sure to monitor and manage it wisely so you can continually improve your score over time.
The Fair Credit Reporting Act (FCRA) requires the three major credit bureaus—Equifax, Experian, and TransUnion—to provide you with a free copy of your credit report every year upon your request. However, if you're trying to build your credit, then you'll likely want to check it more often than that. You may want to sign up for free services such as Credit Karma and Credit Sesame to partner with the credit bureaus to allow you to monitor your credit on a more regular basis.