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What Does It Mean To Have No Credit?

What does it mean to have no credit?

Published 21 April 2022


When you have no credit score, it means that you have never opened a credit account, like a loan or credit card. Having no credit is also known as having a thin file.

Young adults and new businesses often do not have a credit score because they don’t have any credit in their name.

When you don’t have any credit, it’s likely you will struggle to access things like mortgages, loans, credit cards and mobile phone contracts.

You need credit history to have a credit score


Do I Have Bad Credit If I Have No Credit?

No credit means you do not have any credit history. Bad credit means you do and you have likely made some mistakes in managing your finances, which is reflected in a bad credit score.


Is It Worse To Have No Credit Or Bad Credit?

If you have no credit, it means creditors do not have a way to predict how likely you are to pay your credit agreement, as you do not have a track record yet.

It’s not the same as bad credit, which means you have a credit history with major blemishes.


Reasons Why You Don’t Have a Credit Score

  1. You don’t have any credit history or
  2. Your credit history is too old

You Don’t Have Any Credit History

Your credit history starts when a credit provider (such as a Bank) reports information about you to one of the UK’s three credit reference agencies – Experian, Equifax and TransUnion.  If you have never used credit in the UK, you won’t have a history. Which means no credit report and no credit score.

Not having a credit history is likely due to one of the following two reasons:


1. You’re new to the UK

Your credit history does not transfer from one country to another so you will have no score if you are new to the UK.  It can take up to six months to generate your first credit report and score.


2. You’ve never had a credit account in your name

You may have simply never used credit before. This could be because you’re young, or just haven’t needed to.

Even if you pay joint bills, it could be that your name doesn’t feature as one of the account holders. Similarly, if you have a mobile phone contract but it’s not in your name, it won’t show on your credit report.


Your Credit History Is Too Old

When you close a credit account, it remains on your credit report for 6 years. However, after 6 years, it will no longer appear.

So, if you close all your credit accounts and don’t open any new ones, you may eventually not have a credit score anymore.  This typically happens when people leave the UK to live in another country.

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