What Does It Mean When You Don’t Have No Credit Score?

By Trev Gami •  Updated: 01/06/24 •  6 min read

A credit score comprises three digits that range from 300 to 850, and it takes into account your payment history, balance owed if any, number of credit accounts, and debt levels. In South Africa, a credit score plays a pivotal role in determining your creditworthiness when you apply for a loan. Major banks and other lending institutions use credit scores to assess the borrower’s eligibility for loans to make major purchases like buying cars and homes. However, some people still new to the world of credit have no credit scores, but they can still access different types of loans. Read on to learn what it means when you don’t have a credit score.  

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What Does It Mean When You Don’t Have No Credit Score?

If you have not accessed any credit, applied for a credit card, and have no figure attached to your credit profile, you are viewed as having no score. This means your details will not be available on the scoring model used by credit bureaus in South Africa. 

Without a credit score, you may not be eligible for loans from lenders like banks and other big financial institutions. However, you can qualify for other quick loans like payday loans and personal loans that do not require credit checks.   

What to Do if You Don’t Have a Credit Score?

When you don’t have a credit score, it does not necessarily mean your credit is bad or you cannot handle credit. Apart from qualifying for quick loans with no credit score, you can still build your credit profile and score to be eligible for loans from major lenders. You can achieve this by undertaking credit-building activities to create your score and improve it. In some cases, building your credit score from scratch may be easier than fixing a bad one. 

When you decide to build a new credit score, you should know that this process can take time, but if done properly, it offers good results. For example, your new credit account involving a mobile phone contract or retail clothing account may appear on your profile in six months. However, building your credit history via a credit card is an effective strategy although it comes with interests. 

When you use your credit card responsibly and pay off your balance every month, you will quickly gain good standing with bigger lenders for huge purchases. You can achieve this by depositing money into your credit card and using only what you have without getting into debt. Open a credit account with a limit you can afford to familiarize yourself with the functions of the credit system. This will help you build a stable credit score, which you can improve over time. 

Building a good credit score is a process that requires patience. It is about maintaining good behavior and financial discipline. You will need a loan t at some point in time to make big purchases like buying a home, something which you cannot do from your savings.  

How to Build Credit With No Credit History

A good credit score in South Africa is anything between 600 and 700 depending on the type of loan you want to obtain. With this score, you qualify for a loan to buy a home or other big assets. Therefore, you can build your credit with no credit history by taking these measures. 

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First and foremost, you need to open a bank account. Your bank will give you a debit card that you can use for general purchases in retail shops and other stores. It is advisable to use your card and account regularly to perform different transactions so that you learn how to manage your money and keep track of your payments. You need to stay ahead of your rates and bills by paying them on time. Never fall behind in payments for rates, bills, rent, and water to create a good payment history.

Apply for a credit card that comes with a low limit. You can deposit the money you want to use during a specific month in your credit month. Make sure you stay within your limit and avoid creating debt by using the money you don’t have. Pay all your monthly credit card balances on time to build a strong credit history and score. 

Another method to build credit with no credit history is to apply for a loan known as a credit builder. With this type of loan, you can obtain good credit by paying fixed monthly installments. Fixed payments are manageable because you can automate your payments so that you don’t miss any payments.  

Check your credit score with one of the Credit Bureaus in South Africa. This will help you track progress on your credit history. You will also be able to access your credit score. You can review your plans to suit your goals. 

Does Having No Credit Score Affect Getting a Loan?

If you have no credit score, you cannot get a loan from financial institutions like banks and other established lenders. The lenders want to assess your level of risk first before approving your loan application for a big purchase like a house. A credit score is used to measure your creditworthiness. Without one, you may not qualify for financing. 

However, you can get other quick loans like payday loans and personal loans without a credit score. Obtaining a personal loan is like borrowing from your friend. This loan does not involve credit checks and you can use it to purchase different items. 

Lenders make profits from giving credit to individuals and organizations who will pay back the money with interest over time. Your credit score is used to measure your level of risk. With a good credit score, you can enjoy quick approval of your loan application and lower interest rate. You can still qualify for quick loans when you don’t have a credit score. However, you will still need a good credit score in the long run to be able to access loans to buy assets like homes, vehicles, and other properties.  

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