In many ways, borrowing is a game of trust and this goes back to how lenders view you. So if you’ve never taken out credit before, you haven’t been able to prove to lenders that you are a reliable and trustworthy borrower. You have no proven track record.
While it’s true that you may be financially independent and have never had a need to take out credit before, your credit history can end up being negatively impacted because of it.
That’s not to say that your credit score is necessarily ‘bad’, just that it is fairly non-existent. To improve it, you’re going to have to start building it.
How do I improve my credit?
It might sound easier than it is in practice but you’d need to show lenders that you are a responsible borrower – either by being less reliant on credit, or by keeping up with repayments.
Remember that debts remain on your credit history six years – so if you manage to keep up to date on repayments for that period, you may be able to look at applying for other credit after (or near the end) of those six years, once your credit history has had time to repair itself.
If, as mentioned above, you’ve never had a need to take out any credit, you could look at borrowing as a means of building your credit rating.
Even if you don’t need it, you can help build a credit history because you can show lenders exactly that – you don’t rely on it. So for example, you could take out a credit card, use it to buy things you’d normally use your debit card for and then clear it at the end of the month.