Why is my credit so bad?
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My credit score is 0, and I really can’t understand why it is so bad. I’m turning 20 next month, don’t even have a credit card (was turned down) and all I have is a checking account.
It’s true that I have over drafted a few times, but I’ve always paid it back after a month or so. I pay my utilities on time, as well as my cell.
What ever I do, my credit score is still 0. I really don’t know what to do. Thank you.
Your credit score is not bad. You simply don’t have a credit score, yet.
Your bank account, rent, utilities, cell phone and similar bills are NOT extensions of credit. They are not reported to the credit bureau and do not appear on you credit report (unless you default and the debt is turned to collections, and then it’s the collection agency that reports your debt to the credit bureaus).
Credit scores are based on your credit history (i.e. on everything that appears on your credit report). Since you have no line of credit, you have no credit history and as a result no credit score.
It reads 0 because it means no score at all. Fico runs fro 300-850, so even the worst credit score cannot be lower than 300.
In order to build your credit you will need to use some kind of credit, either a credit card or a loan. If you’re under 21, you will find it very hard to get a credit card (you’ve been turned down already – probably because lack of credit).
You will need to provide proof of at least 12 month of consistent employment and sufficient income to qualify for a credit card. A part time job might not be enough. You’re only option may be to start with a secured credit card. Use the card for small purchases, wait for the statement and pay the balance in full every month. That will build your credit and avoid interest.
Good luck
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