What if I never had a credit card or loan before? Will I have a credit score?

Credit Bureau

When you have not borrowed in the past or have never had a Credit Card or a loan, there will be no updates about you with the credit bureau. CIBIL marks such cases as NH or 'No History'. Due to a lack of details, the credit bureau will be unable to comment on your payment behaviour. In such cases, some banks / financial institutions/NBFCs may not provide you with any unsecured credit facilities.

What If I Never Had A Credit Card Or Loan Before? Will I Have A Credit Score?

It is important to have a Good Credit Score for many reasons. Because your credit score is the one that enables you to request more credit in the form of credit cards, loans etc. There are many NBFC’s willing to offer loans and credit card without a credit score, but they charge you a very high interest rate. But keep in mind that not many lenders will be willing to lend to you.

So, how do I establish a credit score?

Since you are new to credit, banks can’t look into your credit score and history to determine whether or not to lend you money. In these cases, banks often look at other factors to determine your repayment capacity (such as your income and employment stability) and decide whether you are creditworthy or not.

If you are new to credit, then you can follow these tips to build a good credit score.

  • Get a secured credit card: A secured credit card can be availed against a fixed deposit and helps in building a positive credit history, provided you pay all your bills on time.
  • Make sure that you don’t apply for too many credit cards/loan products in a short period of time.

Why Secured Credit Card?

Banks issue these cards, which will be a great start for a new borrower to build your credit score. But you must be mindful of potential fees some banks charge for the particular product. If you don’t want a secured credit card, another option is to approach a bank and they might suggest you a credit card with a low credit limit. And gradually you can ask the banks to increase your credit limit, by ensuring that you pay all you bills on time.

As a part of our service CreditMantri helps you to improve your credit score and history. We help you to discover loans and credit cards matched for your credit profile. Reduce EMI and borrowing costs. What’s more important, you will not have to go through a full application and face rejection at the end. We do the hard work for you and weed out what is not suited for your credit profile.