By Derek Nguyen · Editor
Published
Answer in brief
A thin or absent credit file is usually treated as a neutral-to-below-average score, not as poor credit. Some states require insurers to treat no-hit files neutrally. Usage-based programmes and asking insurers directly are the fastest routes to a fair rate.
"I'm 24, I've never had a credit card or loan. I'm not in debt—I just have no file. Will insurers treat me like someone with bad credit?" — reader in Nevada
Usually not as badly as poor credit, but not as well as good credit either. A "no-hit" or thin file produces no score, and insurers handle that in one of three ways: assign a neutral default tier, assign a slightly below-average tier, or exclude credit from your rating entirely. Many states require that a no-hit file not be treated as poor credit.
What helps
Ask each insurer how they handle no-hit files—answers differ. Consider a telematics programme, which prices on your driving rather than your file. And if you want to build a file, a secured card used lightly and paid in full establishes history within six months. See alternatives.
Guides referenced in this post
Guide
How Credit Affects Auto Insurance Rates
What a credit-based insurance score is, how it differs from a credit score, how much it moves premiums, and why insurers are allowed to use it.
Guide
Alternatives When Credit Is Raising Your Premium
Options for drivers whose credit is inflating their premium: life-circumstance exceptions, telematics and pay-per-mile, non-standard insurers, coverage changes and timing.