One thing to understand at the outset is that having no credit history can be even worse than having poor credit.

There are many Americans who are severely hampered because of having no credit at all. The Consumer Financial Protection Bureau (CFPB) documented this glaring fact in their investigative report which reflects the obligatory battle that these people who don’t have credit must engage in. Having no credit history at all means that when a consumer applies for a new credit account with a retailer or creditor, the creditor subsequently inquires with the credit bureau(s) their a member of (either Equifax, Experian or, TransUnion). The credit bureaus will return to the creditor essentially a blank credit report for the applicant. This does not bode well for the applicant because there is no payment history for the creditor to ascertain a proven payment reputation. Consequently, not having any credit history can even diminish ones chances at landing a job or an apartment.

There is an inordinate amount of American consumer’s without credit. In fact, the Consumer Financial Protection Bureau reports that upwards to 26 million are without a shred of credit, labeling them as “Credit Invisible”. Sadly, disproportionately, within this subset of “Credit Invisible” people are African Americans, Hispanic and, low income earners. And it may come as no surprise that this group is comprised of young adults, the great majority being 18 to 19 year old young adults. These young adults have apparently not found the time necessary to build a credit history. Moreover, there are somewhere near to 19 million people who have some or a little credit but still not sufficient to calculate a score.

It was Richard Cordray, the director of the CFPB, who made the notable statement: “When consumers do not have a credit report, or have too little information to have a credit score, the impact on their lives can be profound” further he said, “And given that we found that consumers in low-income neighborhoods are more likely to be credit invisible or unscored, this may be limiting opportunities for some of the most economically vulnerable consumers.”

So, as previously stated, there are roughly 19 million Americans have a limited amount of credit history, but not enough to determine a score. Regarding this subset of consumers, Cordray stated: “A limited credit history can create real barriers for consumers looking to access the credit that is often so essential to meaningful opportunity—to get an education, start a business, or buy a house”

If you fall into any of the above categories and you’re ready to take the necessary action to climb out of the proverbial hole then you should read our article “Only Six Steps To Build Your Credit Score Without a Credit Card” or “Only Five Ways to Build Your Credit From Zero Credit”.