Ask the Experts: Can I Have a Credit Score without a Credit Card?

Even if you’ve never had credit, there’s a chance you still have a credit profile.

After watching my dad struggle to get ahead and my whole family do without because my mom couldn’t stop pulling out the plastic to shop, I swore that I’d never have a credit card. And so far, that’s worked really well for me. I only buy what I have money to afford and I’m really careful to stick to my budget. I even pay for vacations with cash.

Now I want to buy a house so I can stop throwing money away renting. I know my credit will be a big factor during the approval process for the mortgage. But if I’ve never had a credit card, do I even have a credit score that they can assess?

Chantelle R.
Baton Rouge, LA

An expert answer from Gary Herman

Hi Chantelle,

Living credit-free means you aren’t shackled to credit card debtThis is a good question. Many consumers who’ve not used credit can face some challenges. First, I applaud your commitment to live without credit cards – it’s a choice we encourage our clients to try, but most people have to get into serious trouble before they take this lesson to heart. For you to learn from your parents’ mistakes is really commendable.

The answer to your question could be “yes” or “no” depending on the details of your financial history. Here’s why:

  • If you’ve had other types of credit, like student loans, auto loans or any other type of personal debt, then yes – you can have a credit score without having a credit card.
  • If you’ve never had any type of debt at all, then the answer is (usually) no – you won’t have a credit score, because you don’t have any credit history. I’ll explain why I say “usually” further down.

Basically, anyone who has a credit history will have a credit score. A credit score is an easy way for lenders to assess your risk as a borrower based on how responsible you’ve been with debt in the past. If you’ve never had debt, then there’s no way to give you a score because you don’t have any credit history.

On the other hand, if you’ve ever had any type of debt, then there’s at least some history that creditors can use to assign a credit score that assesses your risk. This includes any type of loan, but it also includes some other things that you may not think of at first:

  • If you’ve ever had an unpaid medical bill that was supposed to be paid out of pocket, that counts as medical debt.
  • If you’ve ever had a financial account or bill that was sent to collections, that creates collection debt, too.
  • Any court judgments that have been assessed can also create debt, including child support and alimony that goes into arrears.

Any of the above would create a credit history for you. If you do have any of the items mentioned above on your credit report and if you don’t have any debts that you’ve paid back to balance them out, then you may have a low credit score.

Even if you don’t have any kind of debt, there are other ways that you could have a credit history – identity theft or clerical mistakes. If your personal information was ever stolen there’s a chance someone opened credit cards or took out loans in your name. Or if clerical mistakes confused your social security number with someone else it might show on your history.

Your credit score is generated off the history in your credit reportSince you didn’t think you have a credit history, you wouldn’t have had any reason to review your credit report, so there’s a chance you wouldn’t even know it had happened – until your mortgage lender told you about it when you go to buy your house!

Luckily, there’s a free way for you to check and see if you have a credit history. It won’t give you your score, but it will tell you if there’s enough information to calculate a credit score. Just go to www.annualcreditreport.com to request your credit report from each of the three main credit bureaus. If you have any history, they will give you the report. Otherwise, it won’t have anything to give you, which means you don’t have a credit history and thus don’t have a score.

I should warn you, not having a credit score will present some challenges when you apply for a mortgage, but there are ways to overcome those challenges so you can still get approved. Specifically, there are mortgage financing options specifically geared for first-time homebuyers who don’t have credit history, which seems to describe the exact situation that you’re facing.

So my recommendation would be to check your credit report to see if you even have a credit history. Then talk to a housing counselor to chat about your situation so they can help you find a way to move forward. With a little help, you shouldn’t have a problem achieving your dream of becoming a homeowner.

Good luck and happy house hunting!

Gary Herman
President of Consolidated Credit

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