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I Have A Zero Credit Score – Now What?

Rachel Surman Jul 18, 2018

Capital One® is a proud partner of Borrowell. 

Tens of thousands of Canadians get their free credit score from Borrowell every single day. But sometimes, all they see is a zero credit score! How could this be?

It’s a bit of a “what comes first?” conundrum. If a person has never had credit, banks and lenders may be wary about lending that individual money. But then how is this person supposed to get credit if they’ve never had access to it?

It can be a disappointing process for the customer and there are many reasons why someone may not have a credit score. But have no fear – this blog will explain exactly what can be done about having a zero credit score. But first, let’s start with the basics.

What is a credit score?

A credit score is a metric used by banks and lenders to assess an individual’s creditworthiness. Credit scores, if a person has one, range between 300 and 900 depending on the scoring model. There are two credit reporting agencies in Canada that calculate credit scores: Equifax and TransUnion.

How is a credit score calculated?

Both credit reporting agencies collect financial information from banks and lenders and use this information to calculate one’s credit score using complex models. Borrowell uses Equifax and provides the Equifax Risk Score (ERS) 2.0 score for its customers. It’s a popular score, used by many banks and lenders, and is also the score that is used in Borrowell’s internal lending decisions.

What is a zero credit score?

It’s important to note the distinction between having a zero credit score and having a low credit score. Someone with a low credit score may have difficulty accessing credit because they will need to rebuild their credit. Not having a credit score means the person has an absence of a credit score – the credit reporting agency doesn’t have enough information about the person to produce one.

There are a few reasons why this may be the case:

    New to credit.

If an individual doesn’t have any credit accounts or credit history, the credit reporting agency won’t have enough information to make a decision about whether or not they’re worthy of credit.

    New to Canada.

New to Canada? Welcome! Even if someone had a credit history before, it’s important to build it again in the country they’ve relocated to. Again, it comes back to credit history. 

    Credit hasn’t been used recently.

If a person had a credit card and used it responsibly, in theory, they should have a credit score. But if they stopped using credit in favour of a debit card, which doesn’t report to the credit bureau, there eventually may not be enough information to produce a score.

Why is having a credit score important?

Having a good credit score affects one’s overall financial well-being. It can help one access better financial products, such as the best credit cards and low-interest personal loans. Checking your score and report in general can protect against identity theft (Borrowell also offers customers their full credit report).

Steps to take to build a credit score

Building a credit score takes hard work and patience.It takes diligence and isn’t something that will happen overnight.

The responsible use of a credit card and managing payments is critical to building a credit score. This means watching credit utilization and paying bills on time, every time. However, many Canadians may be uncomfortable taking on a new credit card if it’s something they aren’t familiar with. This is where Capital One® can help.

Capital One offers many types of credit cards – including a secured credit card – that are great for people looking to build credit.

What is a secured card?

A secured credit card is just like any other credit card. The one difference is that cardholders are required to send in security funds as collateral to show their commitment to using the card responsibly.

Unlike a pre-paid card, which needs to be loaded with money, a secured card gives the cardholder a credit limit and a chance to build their credit, as their activity is sent over to credit reporting agencies monthly. With pre-paid cards, no credit card activity is sent to the credit reporting agencies. However, with the Guaranteed Secured Mastercard®, Capital One sends cardholders’ activity to the agencies on a monthly basis, which helps customers build better credit if they use their cards responsibly.

A secured card is an excellent tool to help those with little to no credit history build credit and set themselves up for future opportunities that can come with having a good credit score.

Borrowell recommends the Guaranteed Secured Mastercard by Capital One for those who want to start building their way to a better financial future. Applying is easy, and approval is guaranteed, as long as the applicant:

  • Is at least the age of majority in their province or territory of residence.
  • Hasn’t applied for a Capital One account more than once in the last 30 days or had a Capital One account that was not in good standing in the last year.
  • Doesn’t have an existing Capital One account or a pending application for one.
  • Provides the necessary security funds.

How to use the Guaranteed Secured Mastercard

Once security funds have been received and the account has been activated, it’s important that the card is used responsibly. Here’s what responsible use means:

  • Paying the balance on time, every month. Being on top of due dates and making sure no payments are missed is key to showing a commitment to building credit.
  • Setting up alerts and reminder emails is a great way to stay on top of credit use and keep an eye on upcoming bills.
  • Having patience – building credit takes time! Improving a credit score and establishing good credit history is a process that requires dedication. Over time, ongoing responsible use can help improve your credit score.

The bottom line

The Guaranteed Secured Mastercard from Capital One is a great choice for people looking to build credit, but it’s important to remember that building credit requires a commitment to making payments on time and using credit responsibly. Thankfully, using Borrowell and Capital One products can help people get started.

Learn more about the Guaranteed Secured Mastercard from Capital One.

Zero credit score? Start building your credit score with Borrowell.

The Capital One product details described in this article may have changed since the time of publication. Please see for current product details.

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Borrowell® is a registered trademark of Borrowell Inc. All Rights Reserved. The Equifax credit score is based on Equifax’s proprietary model and may not be the same score used by third parties to determine your credit profile. The score provided to you for educational use is the Equifax Risk Score.

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