According to recent data, up to 35 million American consumers have no credit score whatsoever. While many of these people simply don't like being in debt, not having a credit score can cause problems down the road. Here's how to tell whether you might be in this group and what to do about it if you are.

The minimum requirements to have a credit score
The most commonly used credit scoring model by far is the FICO score, so let's look at the minimum requirements to have a FICO score. According to, to calculate a FICO score, you must have:

  • At least one account that has been open for six months or more
  • At least one undisputed account that has been reported to the credit bureaus within the past six months
  • No indication on the credit report that you are deceased (Note: This happens accidentally more often than you may think)

Many people without a credit score fall into one of two categories: younger adults or retirees. Young people who don't yet have a credit card or haven't yet taken out a car loan or mortgage usually won't have enough information on their credit reports to calculate a score. On the other end of the spectrum, many retirees have paid off their mortgage and car and don't use credit cards, so once six months has passed since an open account has been reported, FICO's ability to score them disappears, even if they have an excellent credit history.

Of course, being unscorable isn't limited to retirees and young people. Anyone who avoids debt is likely not to have a credit score, so if you aren't sure whether you meet the minimum scoring criteria, it could be worth looking into.

Why you need a credit score
Even if you avoid debt and have no intentions of borrowing money anytime soon, it's still important to have a credit score. A credit score gives you the ability to borrow and determines your cost of borrowing. Reasons it might be a good idea to establish a credit score include:

  • If you might someday need to finance a major purchase (house, car, etc.), you'll need a credit score to take advantage of the best interest rates. For instance, you can buy a car with little or no credit, but you'll pay for it.
  • Many employers use credit when making hiring decisions.
  • When you apply for an apartment, your landlord may check your credit.

As we'll see shortly, if you don't like running up debts, obtaining a good credit score shouldn't be too difficult.

Knowing what goes into your credit score can help you build it
Five main categories make up your credit score. Each has a different weight, as shown in the chart below.

Category of Credit Information Percentage of score
Payment history 35%
Amounts owed 30%
Length of credit history 15%
New credit 10%
Types of credit used 10%

The most important factor in your credit score is your payment history, which basically takes into account whether you pay all your bills on time. You can maximize this part of your score by simply establishing a credit account and never paying late.

"Amounts owed" refers to the ratio of your balances to your credit limits, rather than the dollar amounts. If you're just getting started, this is an easy category to master. If you open a new credit card with a $1,000 limit and only carry a $20 balance, you'll only be using 2% of your available credit and will look great in the eyes of the scoring model.

Some of the other categories work against you somewhat when you're trying to establish credit. "New credit" factors in the number of times you have applied for credit recently, as well as how many new accounts you open. Applying to several creditors in a short period of time, as you might when you first start shopping around, can ding your credit score. Your "length of credit history," meanwhile, will obviously be weak when you're first establishing credit. Finally, "types of credit used" won't work in your favor much if you're just getting established, as you probably won't yet have a mix of different account types (mortgage, loan, credit card, etc.).

Still, although three of the five categories are tough to maximize when you're trying to establish a credit score, the two most influential categories are actually easy to manage. You probably won't have a near-perfect credit score right away, but it isn't too tough to establish a good one.

You could get a score without taking on any debt
As a final thought, consider that even if you don't like debt, you can still establish credit and obtain a credit score. You can apply for a secured credit card, which only lets you spend as much money as you have deposited. Or you can get a credit card that you only use for certain purchases that you pay off immediately (like gas or groceries). The point is that you don't necessarily need to take on debt in order to have a credit score.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.