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Is It Okay To Have No Credit?

Updated: May 3, 2023

A hand holding a phone showing a credit report and credit score.

Having no credit can seem like a daunting situation, especially in a world where credit scores are a crucial factor in many aspects of life. Whether you're trying to rent an apartment, apply for a loan, or even get a job, your credit score can have a significant impact. So, is it okay to have no credit? In this blog post, we'll explore the pros and cons of having no credit and what you can do to build your credit history.

Firstly, let's define what it means to have no credit. If you've never taken out a loan or credit card, or you have but haven't used it in a while, then you may have no credit history. This means that there is no record of your borrowing and repayment behavior, and therefore no credit score. On the other hand, if you've taken out a loan or credit card and have a history of late payments or defaults, you may have a low credit score.

Now, let's explore the pros and cons of having no credit.


  1. No debt: If you don't have any credit cards or loans, then you don't have any debt to worry about. This means that you're not paying interest on any loans or carrying a balance on any credit cards, which can save you money in the long run.

  2. No credit history: Having no credit history means that you haven't made any mistakes with credit in the past. This can be a positive factor when applying for loans or credit cards, as lenders won't see any red flags in your credit report.


  1. Difficulty getting approved for loans or credit cards: When you apply for a loan or credit card, lenders will typically check your credit score to determine your creditworthiness. If you have no credit history, they may view you as a higher risk and be less likely to approve your application.

  2. Higher interest rates: If you are approved for a loan or credit card with no credit history, you may be offered higher interest rates. This is because lenders see you as a higher risk, and therefore want to charge you more for borrowing money.

So, is it okay to have no credit? It really depends on your personal financial goals and circumstances. If you don't plan on borrowing money in the future and don't need to worry about your credit score, then having no credit history may not be a big deal. However, if you plan on taking out a loan or credit card in the future, it's important to start building your credit history now.

So, what can you do to start building your credit history? Here are a few tips:

  1. Get a credit card: If you don't have a credit card, consider applying for one. You may be able to get a secured credit card, which requires a deposit but can help you build your credit history.

  2. Make payments on time: Whether you have a credit card or a loan, it's important to make all of your payments on time. Late payments can have a negative impact on your credit score.

  3. Keep your balances low: If you do have a credit card, try to keep your balance low. Ideally, you should aim to use no more than 30% of your available credit.

In conclusion, having no credit can be both a positive and a negative thing. While you may not have any debt or credit history, it can also make it more difficult to get approved for loans or credit cards. If you're looking to build your credit history, start by getting a credit card, making payments on time, and keeping your balances low. With time, you can establish a strong credit history and improve your credit score.

Disclosure: For Change Financial only recommends products we would use ourselves. All opinions expressed here are our own. This page may contain affiliate links and we may earn a small commission, at no extra cost to you. Read our full privacy policy on our website.

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