How to Get a Loan With No Credit | Capital One

You can think of credit history as a track record of how someone handles debt. It covers past debts and current status, according to the CFPB. The agency says that information is compiled in credit reports. And those reports can then be used to calculate credit scores—and to judge how likely a person is to pay back a loan in the future. 

But if someone has little or no credit history, it makes it hard to do any of that, which can make access to credit an issue. It’s more common than you might think. According to the latest CFPB research, almost 20% of U.S. adults are affected by a lack of credit history. The CFPB refers to them as being “credit invisible” or “unscorable.”

It helps to know that having no credit isn’t the same as having bad credit. And people might be credit invisible or unscorable for a number of reasons. You might also see it called having a thin or insufficient credit file. And it could happen for a number of reasons. Here are a few:

  1. They’ve never applied for a loan or credit card in the past. For example, a younger person striking out on their own for the first time or someone who just moved from another country.
  2. Their credit accounts lack any recent activity. The CFPB calls this a stale file. If no activity has been reported within six months of a credit score being calculated, that could affect scoring. 
  3. Their credit accounts are closed. This is another example of a stale file. You could see this happen to the credit of a married person. Getting married doesn’t automatically combine a couple’s credit histories. So if someone who used to have their own accounts closes them after tying the knot, that could affect their credit.
  4. They have credit, but their trương mục was opened too recently. There are a lot of factors that play into timing, but the CFPB explains that it can take six months—sometimes even longer—for a new credit trương mục to be scorable.
  5. Their credit history isn’t being reported. There are multiple credit bureaus that compile credit reports. And there are multiple credit scores and scoring models. If credit activity isn’t reported to all bureaus, a person may be unscorable, depending on which report and scoring model are used. 

Having little to no credit history can be difficult when it comes to borrowing. But being credit invisible doesn’t automatically mean a personal loan is out of reach.