Is it Possible to be Credit Invisible?

credit invisible

You’re living a comfortable life, and your paycheck more or less covers day-to-day activities, so there’s no reason you should ever borrow money, right? I mean, now and then you’ll borrow $5 from your friends for lunch, but overall there’s no good reason to go into debt.

This sort of mentality is the driving factor for what is known as “credit invisibility” — a portion of the consumer population who lack any kind of credit history, and inadvertently preclude themselves from significant financial mobility.

A study from the Consumer Financial Protection Bureau found that over 26 million American adults are credit invisible. This means that one in ten Americans eligible for credit have zero history of borrowing and therefore a non-existent FICO score. This already high percentage further increases as a portion of low-income households.

Whether due to lack of education, waning trust in the economy, or increasing wealth disparity, millions of Americans are choosing to avoid credit altogether, and while this might seem harmless at first blush, there are actually long lasting consequences to credit invisibility.

The missing credit misconception

A common misunderstanding is that no credit is synonymous with good credit. People wrongfully believe that never borrowing money is a means of maintaining a pristine credit report, but in fact, the opposite is true. While there may not be any immediate consequences to credit invisibility, there are long term effects you should be aware of.

No credit is a quick indication to lenders of your inexperience with borrowing money. In the event you need a loan or credit card, but lack credit history, you have zero proof of your borrowing capability and have a low chance of being approved. Credit invisibility inhibits many life milestones such as buying a car or getting a house.

How the credit invisible can build credit

It’s easy to become apathetic when faced with what feels like the insurmountable task of building credit from nothing. But, don’t give up hope — there’s no better time than now. Here are several ways credit invisible individuals can start on the journey toward a better FICO score:

  1. Pay bills on time — Start with the basics. On-time bill payments can do more for your credit than you might think. At the very least, responsibly handling your bills will help you avoid collections which can significantly ding your score.
  2. Secured credit card — These credit cards require no credit score. Since you put down a refundable deposit, you are essentially borrowing with your own money and still building credit. However, the convenience of this option can come at a cost: secured credit cards usually come with high interest rates.
  3. Join a credit union — Credit unions usually offer loans specially designed for the credit invisible called “credit-builder loans.” When you’re approved for the loan, funds are deposited into a savings account and you can only access the money once you repay the full amount. While you are effectively paying off a loan you cannot access, this is a good way for those with no credit to boost their score. Credit-builder loans usually garner an average 35 point increase to your FICO score.

Want to start building or improving your own credit report? offers a free personalized credit consultation and audit of all of your credit accounts. With access to industry-leading repair services, members typically see a 40-point score improvement in the first four months of their subscription.


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Posted in Credit 101
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