Is It Better to Have No Credit?

No, having no credit is generally not better than having good credit. Without a credit history, lenders have little information showing how you manage borrowed money.

This can make it harder to qualify for a credit card or loan. A good credit history can make borrowing easier and may help you qualify for better rates.

KOHO Credit Builder

KOHO Credit Builder is designed to help Canadians establish or build their credit history through consistent monthly payments, without relying on a traditional credit card.

With KOHO Credit Builder, you can:

• +74 points average credit score increase seen using our credit building tools*

• Get approved without a hard credit check or minimum deposit

• Pay no interest on the line of credit

• Track your credit score and credit report directly in the KOHO app

• Build your credit history with monthly payments reported to the credit bureaus

What Does Having No Credit Mean?

Having no credit usually means there is not enough information in your credit file to calculate a credit score.

You may see a score of zero in some situations. This does not mean you have a bad credit score. It means there is not enough information available to generate one.

This can happen if you have never used a credit card or taken out a loan. It can also happen if your credit accounts have been inactive for a long time.

Is No Credit Better Than Bad Credit?

They are different.

Bad credit means your credit history contains information that has resulted in a low credit score. This could include missed payments or high debt levels.

No credit means lenders have little or no borrowing history to review.

Having no credit may mean you do not have negative payment history. However, lenders still cannot see evidence that you have successfully managed credit.

Can Having No Credit Make It Harder to Borrow?

Yes.

A limited credit history can make it harder to get approved for a credit card or loan. It may also affect the terms you are offered.

Credit history can also be considered in other situations. This may include renting a home or applying for certain jobs.

How Can You Start Building Credit?

You need credit activity that gets reported to the credit bureaus.

Options can include:

• A secured credit card

• A credit-building product

• A student credit card

• Becoming an authorized user where applicable

Once you have a credit account, focus on making every payment on time. Keep your balances manageable. Avoid applying for several new accounts at once.

Is It Okay to Live Without Credit?

You can live without borrowing money. However, having no credit history can limit your options when you eventually need financing.

Building credit does not mean you need to carry debt. You can establish positive credit history by using credit responsibly and paying what you owe on time.

The goal is not to borrow more. It is to create a record that shows you can manage credit responsibly.