What is Zero Credit Score?

Your Credit Score is a three-digit number ranging from 300-900 points that helps financial tracking and finding your financial credibility in terms of whether your credit payments are made on time or not. Whenever you apply for a loan, financial institutions check your credit score. In case you have a score greater than 750, you are considered a credible payer of your loans and credit card bills; whereas in case you miss the deadlines for credit card bills, forget to pay EMIs on schedule, your profile is looked down with skepticism and your credit card score lies in the lower range of credit card scores, also called red zones, even marked less than 500.

What is Zero Credit Score?

This situation is often accounted in a case when you don’t have any credit history for the last six months. This doesn’t mean that you don’t have any available credit report but either you have not used a credit card for transactions or you don’t have any pending loans on you. Your credit behaviour is determined by the regular payout made by you towards the loan EMIs and credit card bills. In case there isn’t any credit card bill or loan to pay in a span of last 6 months, your credit score turns out to be Zero.

The credit agencies can also rate the term NA when you have zero credit score. Some financial institutions mark your credit score as (-1) if you’ve never taken a credit or used a credit card or don’t have a credit history, to begin with.

Zero Credit Score Vs. Bad Credit Score:

There is a big difference between bad and zero credit score. A poor credit score reveals that you are a defaulter in paying out your bills, whereas, a zero-credit score means that you don’t have any outstanding dues or loans to pay out, at least in recent times.

In order to get out of the Zero credit score, you need to start using your credit card and ensure timely payments for the bills thereof. This shall especially be helpful if you are planning to apply for a loan in the near future.