What to do when you have no credit score and no credit history

Not every U.S. consumer has a credit score. There are several simple actions you can take when you have no credit score and no credit history to have a score within 6 months. 

Question: I am retired on social security with a $2300 monthly income. Experian/Transunion show no Fico score but Equifax reports 730. After returning from overseas need car loan/credit card. My bank is schwab. They do not do car loans and credit cards are not according to my liking. Have an account with a state credit union but has been unfunded for long time.

Answer: Typically, in order to have a credit score, your credit reports must have:

• At least one account opened for six months or more, and
• At least one account that has been reported to the credit bureaus within the past six months.

I would suggest making a deposit to your credit union in order to re-establish a banking relationship. Most credit unions will work with customers that have little to no credit history.

There are fairly simple actions you can take to build credit and not take on too many credit inquiries:

Savings-secured loan. Ask your credit union for a savings-secured loan. With a savings-secured loan you use a savings account as collateral for a loan. The amount of the loan can be equal to the amount of savings you’re using as collateral. The loan could be as little as $300.

Since you’re looking to re-establish your credit, the best course of action is to keep the cash from your loan in a checking or savings account and use it to repay the loan. Monthly payments are reported to the credit bureaus which is a great way to build your credit as long as payments are timely.

Self-Lender. Self-Lender offers a credit builder loan like the savings-secured loan except you don’t need any money upfront as collateral. Self-lender partners with several FDIC-insured banks to open a certificate of deposit (CD) for you. You pay monthly on the CD for the term of the loan. Those payments get reported monthly to the credit bureaus which helps build credit. At the end of the CD term, typically 12 or 24 months, you get the money. The lowest payment — at $25 a month — has a two-year term. Learn more here.

Secured credit card. A secured credit card requires you place a deposit of your own money as collateral for the card. That deposit is usually your credit limit. Credit card issuers like Capital One offer secured cards plus allow you to prequalify with no impact to your credit scores. That means they will tell you what you qualify for prior to performing a hard credit check and may even qualify you for an unsecured credit card.

Capital Bank offers a no-credit check secured card called OpenSky Visa. No one is turned down for this secured card. Secured card users must submit a refundable security deposit as collateral. You can open the secured Visa card with as little as $200.

Once you have several payments reporting, Experian and Transunion should be able to generate a credit score for you. It’s vital to make payments on-time because payment history accounts for 35 percent of your credit score.

The best of luck to you.