Do you have bad credit? Or do you have NO credit? There’s a big difference.

The difference between the two is imperative for you and any future lender to understand where you are coming from and if they could lend to you.

Take a look at these differences between bad credit and no credit, and learn about where you start out with a new credit score.

Why does no credit look bad?

Having no credit looks bad because, well, there’s just nothing to go off of.

There is nothing to boost your score and no real record of what you’ve been up to with your funds. Therefore, your credit can look bad. However, it’s an easy fix.

And for lenders, it isn’t necessarily a red flag. Sure, it may look “bad.” But this is a far better scenario than having credit that is actually bad!

Lenders can see that your credit score is low, but they can also see that there isn’t much history. There aren’t late payments or missed payments that sprinkle your past. You don’t have defaulted loans, etc. Those are factors that can typically make a credit score plummet.

But with no credit, you don’t have to undo that past. You can just start fresh with healthy habits and take it up from there.

The easy way to look at it is that no credit can look bad because the score is low. When there is nothing to go off of, your score remains low.

There is nothing yet to bring it up from the depths.

Where does credit start?

Credit scores start at the ripe number of 300. Considering an excellent score is 850, starting at the bottom of the barrel seems like a long way off. But as we mentioned above, there’s simply nothing to add to your score.

At the other end of the spectrum, you might think 300 for nothing is a decent start. However, it’s as low as you can go — that’s the bottom of the chart.

Credit scores start at 300 and go on up to 850.

A 300 is given to any new credit user who has had an account for at least six months. Therefore, if you open a credit card and have been using it for six months, you’ll have the start of a credit account.

Don’t despair about starting from scratch. Everyone has done it. There is plenty of time for you to build your score. Simply pay your bills and allow the numbers to rise on their own.

Remember that some of your scores are the age of your accounts, so that’s simply something that can’t be helped.

But everyone is working on the same system. All you can do is pay your bills and allow your credit to build itself.

You may have credit and not realize it

Did you know you could already have credit? And not even realize it? Many people who think they have no credit actually have accounts from the past. If you’ve ever opened a utility bill, purchased a cell phone, bought a car, etc., you have credit.

Those payments that you make each month get reported to various credit bureaus. This could be a pleasant surprise, leading you to have higher credit numbers than you even realized.

Years, even months of on-time payments can do wonders for your score. However, even if this is your first account, don’t fret.

Scores can rise quickly. You just have to show that you are a reliable bet with your ability to pay in full and on time.

With every payment that you make you can help to shape your credit score for the better.

Are some credit bureaus higher than others?

Simply put, the answer is yes. Each major credit bureau focuses on a different method. Therefore, it’s hard to determine who might provide the higher score.

There are three major credit bureaus:

  • Equifax
  • Experian
  • TransUnion

Each is separately operated and has its own set of rules. Therefore, the numbers they come up with can vary. But in most cases, they don’t vary by much.

Don’t get too excited if one bureau has a slightly higher score, as it’s all likely to even out over time.

Besides, in most cases, lenders look at all of your scores and weigh each of them before making a decision.

So there’s no need to fret about the differences between them. Credit bureaus also have little reason to differ. Even when their numbers can range, everyone receives the same information.

There is much you can do to improve your credit score, but the one thing you can’t do is hide information.

These bureaus know who you are and what you do with your money. While this can seem slightly creepy, it can be an excellent way to prove a borrower is or is not capable of repaying a loan.

Keep in mind that payment amounts and times will be reported to all three bureaus. Ti’s just one more step that can help keep you on track with your ongoing payments.

How to improve your credit

There are many ways you can work to improve your credit score. One of the best ways to do so is to open accounts in your name.

Do you have utility bills? If living with a partner or roommate, put both names on the account. Doing so can create you as co-account holders and report payments to credit bureaus.

You can also open up a credit card and use it to help improve your score. Make minimal purchases on the card and then pay it in full on or before the due date.

Your credit can start making immediate rises when this is done. Eventually, you can lead to bigger moves, such as higher amounts of credit lines, which can even further advance your credit.

This works in a few ways. One, it shows that you can make payments on time. It also shows you won’t max out your line of credit, which is also important in drafting your credit score.

Finally, having a credit card and paying it can increase your credit line, improving your credit score.

Users can also open a loan, even just a small one, for the sole purpose of establishing credit. Talk to your bank about getting a loan with a small interest rate and borrowing funds of any amount.

Then you cacn use the money to pay it back in monthly installments. Remember not to blow this money (unless you can also afford the payments out of pocket).

Most banks work with new credit holders on this type of arrangement or a similar setup to help establish credit.

If you don’t qualify for the loan on your own, you can also ask a family member to cosign on your account.

This is a great way to establish credit and show trustworthy payments on your credit history.

Together, all of these methods can work to improve your score, sometimes in a short amount of time.

Talk to loved ones or continue to tune in for even more tips on how you can improve your credit score now and well into the future.

You can prove yourself to be a smart and responsible borrower.


When you first get a credit card, you may not have bad credit, but no existing credit can go off from lenders.

Still, everyone has to start somewhere. It can be cumbersome, but try to remember virtually everyone has been in your shoes.

Having “bad” credit does not exactly boost your ego. But it can also keep you from obtaining funds, such as a loan or subsequent lines of credit.

Your first account can land you at a credit score of 300, also known as the lowest possible score.

But don’t fret — you can easily work to raise your credit score. By showing you can pay on time and in full, you can improve your score over time.

Do this going forward, and you might see your score begin to improve.

Remember that you aren’t alone; everyone started with no credit and had to move their way on up to the top. Pay attention to your financial skills and make smart moves to improve your scores.

Check out Vital Card to learn more about making wise financial decisions that improve your credit score.


Credit Reports and Scores |

What Is the Lowest Credit Score? | Experian

What Is a Bad Credit History and Rating? | Experian

What Are the Different Credit Score Ranges? | Experian

Establishing Credit When You Don’t Have Credit | Equifax®

How to Rebuild Credit | TransUnion

How to “Fix” a Bad Credit Score | Experian

Bad credit | Consumer Advice

What Is a Good Credit Score | Experian

Vital Card blog posts are intended for informational purposes only and should not be considered financial or any other type of advice.