Is No Credit Better than Bad Credit? [No Credit vs Bad Credit]

No Credit vs. Bad Credit

When you have no credit, that means major credit reporting agencies don’t have a reliable means to predict how well you perform with paying bills or repaying loans, lines of credit or other forms of financing.

Bad credit does not amount to the same as no credit. Instead, bad credit means you have made some missteps or even significant mistakes.

Is No Credit Better than Bad Credit?

Having bad credit is worse than no credit in most instances because you’ve shown you can’t handle credit responsibly, and you will need to work harder on improving your credit scores and credit history.

8 Ways to Build No Credit into Good Credit

1. Unsecured Credit Cards

You can pay off the card in full each monthly billing cycle, or you can revolve it to the next month and incur interest on any unpaid balance.

8 Ways to Build No Credit into Good Credit

2. Secured Credit Card

This cash security deposit helps protect the credit card company from recognizing a loss by issuing you a credit card and failing to receive payments.

8 Ways to Build No Credit into Good Credit

3. Credit Builder Loan

These loans function as a tool for people who have low or no credit history. They can use them to begin building up their credit scores by establishing a credit history.

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