How to Live With a Zero FICO Score

How to Live With a Zero FICO Score
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Unless you’re a mathematician or financial guru, you probably don’t understand the methodology behind credit scoring as well as you’d like to. But like most people, you also probably assume that the higher your score, the better. While this is true for the most part – a higher score will indeed help you get better financing and lower interest rates – there is one exception. A FICO score of zero may actually be better than a score that is low on the credit spectrum, like 300. That said, a FICO zero can make life difficult.

Understand what a zero FICO score means. If you’ve done any research regarding FICO scores, you likely understand that the rating scale ranges from 300 to 850. So, you may be asking how any anyone can achieve a FICO score of zero. Although a low credit score (300 to 500 range) indicates that a borrower has not been responsible concerning debt, a score of zero simply shows that the borrower has no debt history on which to assess responsibility. Without credit cards, car loans, mortgages or other accounts that require repayment, there is no way for credit bureaus to rate your creditworthiness. Thus, your zero score simply reflects the absence of credit.

Determine your options. How you'll live with a FICO score of zero depends on your goals. If your goal is to raise your credit score in hopes of becoming a good candidate for a car loan, credit card or a mortgage, you’ll need to start building credit. However, if you want to live with a FICO score of zero and avoid debt altogether, you’ll need to learn to live in a cash-only world. This means that you’ll always pay for purchases, including cars, utilities and everyday needs, in cash. The benefit of a maintaining a zero credit score is that you’ll always live debt-free. The drawback is that banks won’t be able to evaluate whether or not you’re a responsible borrower.

Save money. To live with a zero credit score, you’ll need to learn to save money. That’s because you’ll need to make any large purchases in your life -- such as a car or home -- in cash. Often, your credit will be checked for anything from getting a credit card to renting an apartment. If you need to rent a place to live and have a credit score of zero, you may need to rent from a management company or private party who will not check your credit. It’s also important to learn to save money because, if hard times hit, you may not be able to get a loan or credit card to help pull you through.

Build your credit. If you’re living with a zero credit score but want to build a healthy debt profile, you need to begin building your credit. This can be difficult at first, because with no credit history, banks and other credit companies may not be willing to lend you money. One thing you can do to get started is apply for a secured credit card. A secured credit card is a credit account that requires you to make a deposit before credit can be issued. For example, you may make a $200 deposit to the credit card company and in return be issued a $200 credit limit. Secured credit cards are marketed to consumers with low or no credit scores. As you use the credit card and consistently pay it back on time, your credit score will increase, which enables you to get more (and better) credit.


  • For some, a zero FICO score is actually a goal because it means living completely debt free. For those with an actual credit score, achieving a zero could take years.


  • Good credit is extremely valuable because it gives you buying power. With a zero FICO score, your buying power is limited to your cash on hand and that in your checking or savings accounts.