Why My Credit Score Showing Zero (0)?

Last Updated : Jan. 11, 2025, 5:15 p.m.

The credit score is a numerical score between 300 to 900 that summarizes your credit history. It helps credit providers (Like banks, credit card companies, or other potential creditors) to know about a borrowers’ creditworthiness. A high credit score leads to easy approval of credit. You will be eligible for lower interest rates and favourable loan terms and conditions. The credit score is reflected in an individual’s credit report. The credit score increases or decreases depending on the financial discipline of the individual and based on how the person handles credit. There is also a possibility where your credit score will be zero or negative. Let us now understand why?

What is a Zero or negative Credit Score?

If your CIBIL credit history is only available for less than six months, then your credit score will show as zero or NA. It means that the credit reporting bureau does not have enough information about your credit account.

On the other hand, a negative credit score or NH means that you simply do not have a credit history. It means that the individual has not taken any form of credit till now to build their credit profile. To compute the credit score, the bureau needs a credit history of at least 6 months.

Is it Possible to Get Loans or Credit Cards with a Credit Score of Zero or (-1)?

Yes, you can get credit even with a zero or negative credit score. Here are few ways in which you can obtain credit:

• Research and find out banks or potential lenders who are willing to consider your case. Some lenders and financial institutions will be ready to lend for low or no credit scores. They will look at other factors like income, job stability, account balance, etc.
  
• Apply for a secured credit card . Make timely repayments of your credit card bills before the due date. Then, you will be able to get a good credit score.
  
• Take a loan by pledging a collateral. You can keep your own property as security. In this type of loan, you may be able to get a good amount at a low interest rate. Having collateral such as real estate, FDs, gold, vehicles, etc. as backup eliminates the risk associated with the repayment of the loan. If you do not repay the loan on time, the lender will sell the collateral and recover the amount they had lent to you in the first place. Collateral provides an assurance that the loan amount can be recovered.

How to Build Your Score from Zero or Negative?

Here are some tips to build a good credit score from zero or negative:

1. Open a secured credit card and repay the bills on time and in full. This reflects that you can manage your credit well.
2. Become an authorized user on the card of a family member who has a good credit history. His good history will be added to your credit report.
3. Use the buy now pay later option for purchases and pay the EMIs on time without any defaults.
4. Limit your credit applications to avoid too many hard inquiries.
5. Apply only for affordable loan amounts.
6. Check your credit report regularly and instantly raise any errors found with the credit bureau. Accurate data is required to compute your credit score.

With consistent and responsible handling of your credit over a period of 6 to 12 months, you can quickly build your CIBIL score from scratch. Aim for low balances and zero missed payments.

Free CIBIL Score Check

Point Which Bank/NBFCs Keep in Mind While Checking Eligibility of Zero Credit Score Borrowers Against Their Credit Request

Credit Score ‘ 0 ’ means there is no credit account history of the borrower due to available credit track less than Six month. So since the lenders cannot depend on a credit report for lending the credit request of the borrower, the lender needs to check some details of the customer on the basis of which they will decide whether the borrower is high, medium or low-risk customer and he will be able to repay them back on time or not. Below are some of the factors that bank or NBFC check before lending the credit request by the borrower having 0 credit score.

Balance in Saving Account:- Bank review whether the customer is maintaining decent balance amount (more than minimum balance) in his bank saving account, as maintaining the decent balance indicates the individual have stable finances position. and if there is consistent low balance than it indicates that individually does not have financial stability, and the risk goes higher of not getting repaid if the bank provides any credit to them.

Income Proof:- Bank/NBFC checks whether the borrower has stable income or his income is not stable from which they can judge the risk level of the borrower of not repaying the credit amount.

Higher the income higher the chance of getting a good loan amount with a better rate of interest.

No Cheque Bounce:- One of the main reasons for bouncing of cheque is when the individual does not have sufficient balance in their bank account. This impact negatively on your credit score.

Type of Residence:- Bank/NBFC checks the residential status of the borrower whether he is rented or have their own house. This helps the lender to eliminate the risk factor of coming across a fraud as there is more risk in a rented house profile as compared to their own house profile.

Job Profile:- Bank/NBFC evaluate the eligibility of the borrower by reviewing their job profile which includes the company where they are working (in which category that is falling as per their company norm- basically categorise as Super A, Cat A, Cat B, CAT C and so on) the stability of the borrower in his company, the income stability, based on which bank decide whether they have to provide the loan to the borrower and if yes then how much loan amount they can provide at what interest rate.