Why Do I Have No Credit Score?

Updated: March 16, 2024 Author:

Quick Answer: If you aren’t registered on the Electoral Roll and have had no credit in the past six years, you will have no credit score. That’s because your data will not be in the UK financial system. The term for this is “Credit Invisible”.

    Are You a Credit Invisible?

    Data is the currency of modern times. Your credit score is based on the information shared with Credit Reference Agencies. The lowest credit score you can have is zero and that only happens if you are not registered on the Electoral Roll (used for identity verification) and have had no credit in the past six years, as that’s the limit for how long Credit Reference Agencies retain data after which, the information comes off your credit report. Data from Experian suggests there are as many as 5 million Brits invisible to the financial system. 

    The Impact of Thin Credit Files and Being Credit Invisible 

    Companies use Credit Reference Agencies for two reasons. To establish your identity (proving you are who you are say you are), and to see your track record of managing finances. Two types of credit checks can be done. A soft check and a hard check. A soft check reveals a limited set of data and is used as an eligibility checker. Once you apply for credit, a hard check is done to view a more complete list of your credit history. If you only have one or two accounts in your name, you’d be in the thin credit file category. Companies won’t have enough data to perform a thorough financial risk assessment. If you have no credit score, there will be no data on file for them to check. The result will be credit applications being rejected. 

    The Difference Between Having No Credit Score and a Low Credit Score

    Having no credit score means that none of your details are in the financial data system. Having a thin credit file means companies have a limited data set to evaluate your creditworthiness. When you cannot get a credit score, it’s because the Credit Reference Agencies can’t identify you. A soft credit check relies on Personal Identifiable Information (PII) to verify your identity. When you have no credit score, companies using credit checks have no way to verify your identity. It makes life difficult. 

    5 Reasons for an Invisible Credit File and How to Fix Thin Credit Reports

    1. Living with Parents

    Credit reference agencies don’t start recording personal data until you turn 18. You can’t get a credit agreement before that age anyway. Once you turn 18, you can apply for credit, but it’s unlikely to be approved as a single application. Usually, companies will require a guarantor or a co-signer. If your parents use family plans to pay for your mobile, or perhaps have you listed as an additional driver on their car insurance policy, those details go to their credit reports. Not yours. Until you begin paying bills in your name, your credit files will remain thin.

    2. Not on the Electoral Roll

    Registering to vote gets your details added to the Electoral Roll and that helps your credit score. It’s a quick way to boost your credit score because it’s used as part of identity verification. Not everyone in Britain is eligible to vote though.  You need to be a British citizen, Irish citizen, or EU citizen. Those from Commonwealth countries must have leave to enter or remain and it can be any type – “indefinite, time-limited, or conditional”.

    If you can get on the Electoral Roll, you’ll instantly get a credit score. It will be low as it’s only verifying your identity. Until you have a credit history, you’ll continue to have thin credit. If you aren’t eligible to register to vote, you can contact each credit score company to add a Notice of Correction to your credit file letting lenders know why you aren’t eligible and that you have a long-term address in the UK, and secure income to repay credit. 

    3. No bills Being Paid from Your Bank Account

    Raising your credit score means you need to build a credit history. That’s done by getting credit approved by a business, agreeing to the terms of a credit agreement and signing it in your name, then paying it on time, each month. The lower the cost of a product, the easier it is to be approved.

    For higher-value products like an expensive mobile phone handset, you may find that you’re asked to apply with a guarantor. Does getting a guarantor loan affect your credit score? Yes! That’s because the guarantor is a third party assuring that repayments will be made, by you. If you default on the payment, the guarantor becomes liable for repayments. If you can get a guarantor, don’t use their bank details for the repayments. Pay it from your bank account so that the payment history is directly linked to your credit files. 

    Also worth noting is that your credit report is personal to you. Being married doesn’t link your finances. For couples living together, if all the bills are paid from a partner/spouses account and in their name, you may have no credit score or thin credit files. Even sharing a credit card account does not report to both people’s credit files. Only the primary card holder. In the UK, you can’t get a joint credit card account. Just an additional cardholder that’s issued with a second card to the primary cardholder’s account. 

    4. New to the UK 

    Credit data is retained by CRAs for six years then it drops off your credit file. If you’ve left the UK for six years or more, on your return you’re likely to be credit invisible or have a thin credit file. Neither is good for being approved for any type of credit agreement. When you first move (or move back after 6 years) to the UK, you start from scratch with a credit score of zero.  

    5. Living in Shared Accommodation 

    Millions of people in the UK live in shared accommodation in what’s called “Houses in Multiple Occupation”, (HMO). Landlords rent to groups of people, and to make it easier for bill payments, some will include water rates, electricity, and gas within the rent fee. That way the landlord can be sure the bills are paid, reducing the risk of utilities being suspended for non-payment. In these circumstances, even if you are on the Electoral Roll at the address, there won’t be utility bills in your name. That can lead to a thin credit file when the only details in your credit history are perhaps a bank overdraft and a phone contract. In such cases, there is a service from Experian called “Boost” which uses the Open Banking System to record data to your credit files including regular payments toward  Council Tax, money transfers to savings accounts, and regular subscription payments to the likes of Netflix, Spotify, and Amazon Prime.