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Your credit score plays a huge role in your ability to borrow money, whether in the form of a credit card, mortgage, or auto loan. A higher credit score indicates that you’re good at managing your debts and paying on time. But when lenders see a lower credit score, they often shy away from approving applicants, since a lower score could be associated with a history of late payments and carrying too much debt on a whole.

But what if you don’t have a credit score at all? If so, you’re not alone. As of 2022, an estimated 45 million Americans did not have a credit score, according to the U.S. Government Accountability Office.

Now you might assume that being without a credit score is no big deal if you have no plans to borrow money. But there’s more to the story than that.

Why you still need a credit score, even if you can’t stand being in debt

Some people hate the idea of being in debt and will go to great lengths to avoid it. Although it’s difficult to buy a home in cash as opposed to financing one with a mortgage, it technically can be done. And you can pay for all your bills and other monthly expenses with cash, debit, or check instead of having to swipe a credit card.

If you’re of the mindset that all debt is bad and that you’d rather live a debt-free life, then you may not be motivated to establish a credit history and get a credit score. But not having a credit score might hurt you in more ways than expected.

For one thing, without a credit score, you may have a hard time getting approved to rent a home. A landlord generally won’t just take your word for it that you’re good at paying on time.

Also, if you don’t have a credit score, you may need to make a deposit (or a larger one) when you sign up for utility services. And you might struggle to get onto a cellphone service contract, too.

Finally, in many states, insurance companies can take credit scores into account when setting premium rates. Applicants without a credit score risk paying higher premiums for products like homeowners, auto, and life insurance.

How to get yourself a credit score

Not having a credit score at all could end up being a problem for you. So it pays to take steps to establish a credit score, even if you don’t intend to use it to borrow money.

One route is to get added as an authorized user on a family member’s credit card account. But that’s not an option for everyone.

In that case, it could pay to apply for a credit card, put a small recurring charge on it, and pay that bill on time and in full every month. You could do this with a regular credit card, or with a secured credit card where you put down a deposit that serves as your credit limit. If you don’t have a credit score, you may need to start with a secured credit card before you’re approved for a traditional one.

Of course, you may also want to remind yourself that debt isn’t automatically a bad thing. Credit cards tend to get a bad rap because they’re notorious for charging large amounts of interest. But you don’t pay interest on credit card balances you pay off in full every month.

If you’ve managed to get by without a credit score and without borrowing money, chances are, you’re good at managing your paycheck. That makes a credit card a potentially less risky prospect for you.

Plus, there are benefits to using a credit card. Aside from building a credit history and establishing a score for yourself, you can get rewarded in the form of cash back on your purchases. Click here for a list of the best cash back credit cards.

There are people who manage to function without a credit score. But there are pitfalls you might encounter if you have no credit history whatsoever. So it pays to try to establish a credit score for yourself — even if you opt not to borrow any money once you have one.

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