Live without credit possible points? Forty-five million Americans, or 20 percent of the population, do just that, according to the Consumer Financial Protection Bureau.
Consumers in this group are either considered “credit invisible” meaning that they have no credit history, Fine Bank, Agree Bank, Lite Lender or “unscorable” with one of the three nationwide credit bureaus, which means their credit history has little or no current activity .
But how do they get through when it seems a credit score is needed just to do everything?
What it means to have no credit
No credit score is not to be confused with a low credit score or bad credit. And it doesn’t always mean a consumer has no credit history.
The Fair Isaac Corporation, which generates the FICO Score, states that for a score to be generated, your credit report “must have at least one account opened for six months or more and have at least one account that has been reported to the credit bureau . ” So within the past six months. ”It is possible for a consumer to have a credit history, but not a credit score, as would be the case for consumers who pay off their debts and close their accounts.
Should you not have a credit score as a result of a lean or nonexistent credit history, or if you are considering closing your accounts after paying debts you know that life without a credit score is possible, but it is not always easy.
Here are some examples where no credit score can be challenging.
Renting an apartment
An apartment leasing without a credit score can take a little bit of legwork on your part to find a landlord who will work with you. Large management companies typically process a significant number of applications across multiple properties and tend to rely heavily on FICO scores.
On the other hand, if you are hiring from a smaller company or an individual, they can be more flexible in their request for a credit score. Preventively tell a potential landlord you don’t have a credit score before they should check to increase your chances of being mild.
Looking for employment
You may have heard that potential employers can check your credit. Unless you work in one of the 11 states that prohibits credit checks before hiring, that’s true – with your consent, a potential employer can check your loans during the application process.
But it is the information in your credit report that you do not give them access to your credit scores. The lack of a credit score does not affect hiring decisions.
Securing car insurance
Car insurance companies do take credit history into account during the underwriting process. However, you use a certain credit-based insurance score that is derived from the information in your credit report, not your current credit score.
According to Progressive “, an insurance score is a score of information calculated on your credit report … we develop our procedures by analyzing the following data from people we insure: accident and insurance history; Credit report information.”
Your credit score is not a factor in securing auto insurance while your credit history is on.
Getting a cell phone and building utility accounts
Some cell phones and providers check your credit if service extends to you. But they differ in how they evaluate the lack of a score.
Some service providers simply leave this factor out of their decisions, while others do not extend their best prices or service plans to you or ask for a deposit.
Applying for a mortgage
Buying a home without a credit score will take some effort, but is doable.
The mortgage drawing process is detailed and rigorous, and as a result, most lenders put a lot of emphasis on credit scores to assess your creditworthiness.
However, some mortgage issuers will do manual drawing where they will evaluate your file without a credit score. Typically, you will need to provide proof of a longer timely payment history for your non-credit accounts such as rent, phone, utilities, and other monthly bills.
You are less likely to find a large bank to sign a mortgage without a credit score, but you have options with smaller lenders, online lenders, local banks and credit unions.
A life without a credit score
It is possible to survive without a credit score. But we live in a credit-driven world that is sometimes difficult to open without a score. Impossible? No. Challenging? Yes.
It is important to know what lies ahead of you should you not have a credit score and decide if that is the way for you.