How to build Your Credit If You’re “Unscorable”


There are a few situations in a person’s life that can lead to their credit being “unscorable.” Essentially, they don’t have anything that credit agencies can use to determine credit risk – and so, they are unable to produce a credit score for the individual. People who pay off their mortgage and credit cards and close them can become “unscorable,” as those who haven’t had an active account in six months won’t be scored. Young people who have no credit history can also be unscorable.

This can be damaging for a number of reasons – obviously, no credit score can limit a person’s ability to get a loan, get utilities, move into an apartment, or any other activities that require a credit check to accomplish.

If you don’t have any credit history, follow this list of tips to start building up a credit.

Get a Secured Card

First step in becoming “scorable” is to open a few accounts. One of the most basic forms of starting credit history is a credit card – but you may be unable to get one with no credit score. Starting with a secured card, which is tied to an actual amount of money, will help you get started.

Open Other Accounts

Over time, you can diversify the accounts you can hold in your name. For instance, a regular credit card, utilities, store credit cards, and a lease are all types of accounts that can affect your credit. You will likely have to slowly add these to your name as you have no prior credit history.

Make Payments on Time

Make all payments on the aforementioned accounts on time and in full. This will help build a positive, healthy credit score. You can make small charges on credit cards and pay them off in full when they come due.

Get Your Name Added to an Old Account

Ask a friend or family member you can trust if you can be added to one of their old credit cards as an authorized card user. You don’t even have to have the card in your possession, and this can increase your score substantially.

Keep Your Credit Utilization at 30% or Under

Try to stay under 30% credit utilization rate – this means only using 30% or less of your available credit. For example, if you have a $1000 limit credit card, never keep your balance above $300.

Don’t Open Too Many Accounts

You do need to open an account or two to start building credit history. However, opening too many accounts will cause too many credit inquiries, which can damage your credit. Stick to one or two accounts and/or credit cards as you begin.

Don’t Miss Payments or Make Late Payments

Now that you’re on your way to a legitimate credit score, don’t jeopardize it by missing payments or making late payments. This has negative consequences on your credit report, and is the last thing you need when starting to build up your credit score.

Don’t Close Accounts You Aren’t Using

If your credit is unscorable, you likely don’t have any old accounts – but in the future, don’t close out accounts just because you aren’t using them. Keeping them open means they keep reporting your activity to the credit bureaus, keeping your credit score alive.

Don’t Keep Your Utilization at 0%

Contrary to common sense, keeping a credit card for emergencies, and never swiping it, isn’t a healthy financial practice – at least, not as far as your credit score is concerned. To build a credit score, you need to use your credit responsibly, not ignore it.

Don’t Expect Instant Results

Don’t get discouraged if you open a new credit card, make a few payments, and don’t instantly have a top notch credit score. Earning a good credit score is a time consuming process and can take years in many cases. Don’t give up!

Follow these tips to get on the radar of the credit bureaus. No matter what experiences (or lack thereof) led to your “unscorable” credit status, the right behavior can fix this problem. In fact, it can become fascinating and enormously gratifying to watch your smart financial behavior pay off with a healthy credit score in the long run.


Posted in Credit Score
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