Prior to 1989, Credit Scores Didn’t Exist

The concept of credit scores began in 1989, and would evolve into today’s popular scoring model — the FICO Score. Before the FICO score, credit was determined based on the character of the consumer. For example, you could have an excellent credit score, but if the lender didn’t like something about you, they could deny you credit anyway. Character-based decision making would eventually lead to the need for a more just method of scoring, one that wasn’t based solely on personal judgment and first impressions. By 1991, all three consumer reporting agencies were selling FICO scores to lenders. That revolutionized the way lenders assessed consumer risk because it only considered credit histories. Today, several factors are used to determine credit scores, including payment history, total amount owed, and credit history length. When it comes to credit scores, you can’t get a zero. If you have no credit history, then you have no score at all. Those who are found in that category are mostly students (pre-credit) and senior citizens who have no consumer debt. The best thing to do if you have no credit score — commonly referred to as a “thin file" — is to open a secured credit card and begin to build a credit score.