How can I have credit cards without having a credit history or credit score?
That is an opinion.  I don't think so.  Here are some differences: If you use credit responsibly and take the time to make sure the reporting agencies are being accurate, a good report can benefit you.  So that isn't like a criminal record. What is also important to know is that in the United States, a credit report is about you, not for you.  You are the product being sold.  This is, in my opinion, and unfortunate situation but it is what it is.  You will more than likely benefit for keeping a good report, even if you never use credit. There are many credit scores that can be calculated from your report; the score is just a number used to compare and evaluate you on a common set of criteria. If you think about it, that doesn't make sense.  The score is a reflection of how you use credit.  Having and using credit is a commitment.  Your are committing to the lender that you will repay them as agreed. Your choice is who you decide to make agreements with.  I personally find the business practices of my local credit union to be more palatable than the business practices of the national bank I was with.  I chose to use credit provided by the credit union rather than by the bank.  I am careful about where I take auto loans from, and to what extent I can control it, where I take home loans from. Since it is absolutely a commitment, you are personally responsible for making sure that you like who you are making commitments with. For instance and to give a comparison to the US - in Austria, almost everybody gets a credit card (without a credit history (e.g. a young person) / with a bad credit history & with a good credit history).  The credit history is in the USA much more important than in Austria. In future, the way to assess a credit history will change due to analysis of social networks for instance. This can be considered in addition to traditional scoring procedures. Is your credit history/score like a criminal record? Nope. I mean is it always with you?  Not really cause a criminal record will be retained on a central storage (to state it abstract) and a credit history can be calculated by private companies. Also, are there other ways to get credit cards besides with a bank? That depends on the country. In Austria, yes.
Switch to cash for a few months. No debit. No credit. This will help for two reasons: Once you've broken the bad habits, you should be able to go back to cards for the convenience factor. Get a credit card is NOT the answer. The reason people have a bad (or no) credit score is often because they're new to the country, have just turned 18, have previously fallen into arrears or are just bad with money. Getting a credit card is risky because, if you don't stay on top of your payments, it'll just damage your score even more.  Now, it sounds like I hate credit cards - but I don't, and they do have their benefits. But avoid them if possible because they can be more hassle than they're worth (ie, paying the credit back on-time, cancelling accounts when the interest comes in, moving money in and out of accounts). It's risky borrowing money from anywhere whether it's a payday lender, a bank, a credit card, etc., so use them as a last resort. If you've got your own income then that's amazing!, try not to live outside of your means and your credit score will look after (and increase) itself. It takes time to build a good credit score, but always make sure you pay the people you owe on time and the full amount. I'd stick with paying your phone provider (and any other direct debits you have setup) and avoid getting a credit card. I'd recommend Noddle to keep track of your credit score and read their FAQ on how to help build it. Unlike Experian, it's free forever so not quite as detailed... but Noddle are owned by CallCredit - one of the biggest Credit Reference Agencies in the UK so they should have the latest information on yourself. In conclusion, if you already have financial commitments like a mobile phone bill, gym membership, store cards, anything that gets paid monthly by direct debit... your credit score will increase (provided you pay the full-amount on time).   I hope this helps. PS. I don't work for any of the companies here, but I've been working in the finance sector (more specifically, short-term loans) for 3+ years now. To get a credit history you need to use credit from someone that reports to the major credit agencies.  I don't suppose you have to BUY anything. You could just get a cash loan and hold it for a long time, but it seems silly to pay interest only for the purpose of building credit. The student loan should help you build credit. Also, I'm assuming you buy things all the time like gas, groceries, etc. Why not put those on a credit card and pay the balance off every month? That way you aren't buying anything specifically to get credit. Also there are numerous other benefits: Another suggestion: Set up your cards so the full balance is drafted from your bank automatically on the due date. That will ensure that you always pay on time (helping your credit) and also make you think twice about putting things on the card that you can't afford with the cash you have in the bank. "I strongly suggest you look at CreditKarma and see how each aspect of what you are doing impacts your score. Here's my take - There's an anti-credit approach that many have which, to me, is over the top. ""Zero cards, zero credit"" feels to me like one step shy of ""off the grid."" It's so far to the right that it actually is more of an effort than just playing the game a bit. You are depositing to the card frequently to do what you are doing. That takes time and effort. Why not just pay the bill in full each month, and just track purchases so you move the cash to the account in advance, whether that's physical or on paper?  In your case, it's the same as charging one item every few months to keep the card active. If that's what you'd like to do, that's fine. I'd just avoid having the card take up too much of your time and thought.  (Disclaimer - I've used and written about Credit Karma. I have no business relationship with them, my articles are to help readers, and not paid placement.) mhoran's response is in line with my thinking. His advice to use the card to build your score is what the zero-credit folk criticize as ""a great debt score."" Nonsense. If you use debt wisely, you'll never pay interest (except for a mortgage, perhaps) and you may gain rewards with no cost to you." "First I would like to say, do not pay credit card companies in an attempt to improve your credit rating. In my opinion it's not worth the cash and not fair for the consumer. There are many great resources online that give advice on how to improve your credit score. You can even simulate what would happen to your score if you did ""this"". Credit Karma - will give you your TransUnion credit score for free and offers a simulation calculator. If you only have one credit card, I would start off by applying for another simply because  $700 is such a small limit and to pay a $30 annual fee seems outrageous. Try applying with the bank where you hold your savings or checking account they are more likely to approve your application since they have a working relationship with you. All in all I would not go out of my way and spend money I would not have spent otherwise just to increase my credit score, to me this practice is counter intuitive. You are allowed a free credit report from each bureau, once annually, you can get this from www.annualcreditreport.com, this won't include your credit score but it will let you see what banks see when they run your credit report. In addition you should check it over for any errors or possible identity theft. If there are errors you need to file a claim with the credit agency IMMEDIATELY. (edit from JoeT - with 3 agencies to choose from, you can alternate during the year to pull a different report every 4 months. A couple, every 2.) Here are some resources you can read up on: Improve your FICO Credit Score Top 5 Credit Misconceptions  9 fast fixes for your credit scores" Credit cards are a golden goose for banks, as they get to issue high-interest loans and simultaneously generate alot of fee income. Debit cards aren't quite as good, but they still generate substantial fee income -- ~2% of every credit/non-PIN debit transaction goes to the bank and credit card network. Credit histories exist because they are the most effective tool available to predict whether you will pay back your loans or not. You don't need a credit history to buy most things, you need a credit history to get a large loan. Think of it from perspective of a lender: Credit scoring is the bank's way screening out people who are expensive to do business with. It's objective, doesn't discriminate on the basis of race, sex or other factors, and you have recourse if the rating agencies have incorrect information. this post offers great steps you can take to responsibly and effectively manage your existing line of credit. we believe that by carefully observing these guidelines, you will not only succeed in building and maintaining an excellent credit history but you will also avoid incurring pesky fees and charges usually imposed on delinquent unsecured credit cardholders. and do help us promote it by telling your friends to read and share it with their friends too! You can do this if you merge Credit Cards with personal loans. You will have to pay 1 upfront fee but you can bounce a balance between 4 CCs almost indefinitely if you do it right. You have to have good credit though. "A credit card is a way to borrow money. That's all. Sometimes the loans are very small - $5 - and sometimes they are larger. You can have a credit card with a company (bank or whatever) that you have no other relationship with. They're not a property of a bank account, they are their own thing. The card you describe sounds exactly like a debit card here, and you can treat your Canadian debit card like your French credit card - you pay for things directly from your bank account, assuming the money is in there. In Canada, many small stores take debit but not credit, so do be sure to get a debit card and not only a credit card. Now as to your specific concerns. You aren't going to ""forget to make a wire."" You're going to get a bill - perhaps a paper one, perhaps an email - and it will say ""here is everything you charged on your credit card this month"" along with a date, which will be perhaps 21 days from the statement date, not the date you used the card. Pay the entire balance (not just the minimum payment) by that date and you'll pay no interest. The bill date will be a specific date each month (eg the 23rd) so you can set yourself a reminder to check and pay your bill once a month. Building a credit history has value if you want to borrow a larger amount of money to buy a car or a house, or to start a business. Unlike the US, it doesn't really have an impact on things like getting a job. If you use your card for groceries, you use it enough, no worries. In 5 years it is nice to look back and see ""never paid late; mostly paid the entire amount each month; never went over limit; never went into collections"" and so on. In my experience you can tell they like you because they keep raising your limit without you asking them to. If you want to buy a $2500 item and your credit limit is $1500 you could prepay $1000 onto the credit card and then use it. Or you could tell the vendor you'd rather use your debit card. Or you could pay $1500 on the credit card and then rest with your debit card. Lots of options. In my experience once you get up to that kind of money they'd rather not use a credit card because of the merchant fees they pay." "Build your credit history by paying the credit accounts you have on time.  Review these periodically and close the ones you do not need. Ignore your score until it is time to make a large purchase.   Make decisions regarding credit on the basis of whether the debit would be better paid with cash or credit.  Not on credit score. Keep in mind that if your income is invested in your future, your money is working for you.  The income that is paying debt is working for the lenders. Mint is a financial services industry company (Intuit).  You are their product.  Intuit makes money from Mint by placing ads on the site where you visit frequently, and by gathering data about those who subscribe to their service.  They also are paid to refer you to credit card companies to ""build credit.""" Credit history is local, so when you move to the US you start with the blank slate. Credit history length is a huge factor, so in the first year expect that nobody would trust you and you may be refused credit or asked for deposits. I was asked for deposits at cell phone company and refused for store cards couple of times. My advice - get a secured credit card (that means you put certain sum of money as a deposit in the bank and you get credit equal to that sum of money) and if you have something like a car loan that helps too (of course, you shouldn't buy a car just for that ;) but if you're buying anyway, just know it's not only hurting but also helping when you pay). Once you have a year or two of the history and you've kept with all the payments, you credit score would be OK and everybody would be happy to work with you. In 4-5 years you can have excellent credit record if you pay on time and don't do anything bad. If you are working it the US, a lot of help at first would be to take a letter from your company on an official letterhead saying that you are employed by this and that company and are getting salary of this and that. That can serve as an assurance for some merchants that otherwise would be reluctant to work with you because of the absence of credit history. If you have any assets overseas, especially if they are held in a branch of international bank in US dollars, that could help too. In general, don't count too much on credit for first 1-2 years (though you'd probably could get a car loan, for example, but rates would be exorbitant - easily 10 percentage points higher than with good credit), but it will get better soon. Obviously the only way to have good credit is by owing money, and making payments as scheduled. To do this I would do everything I could to place all of your required expenses on a credit card. This can include paying rent, food, transportation, etc.  These are all payments that you already make, but simply move then through a different payment vehicle. It sounds like at this time you may not have a credit card that allows you to do this, but I would watch out for those cards that come in via mail with all kinds of special deals. While you have not mentioned if you have any of this, make sure that you keep up with your past debt and negotiate repayment if needed. Once your credit improves, you should begin to see doors opening that are problems now. I would say you are typical.  The way people are able to build their available credit, then subsequently build their average balances is buy building their credit score.  According to FICO your credit score is made up as follows: Given that you had no history, and only new credit you are pretty much lacking in all areas.  What the typical person does, is get a card, pay on it for 6 months and assuming good history will either get an automatic bump; or, they can request a credit limit increase. Credit score has nothing to do with wealth or income.  So even if you had 100K in the bank you would likely still be facing the same issue.  The bank that holds the money might make an exception. It is very easy to see how a college student can build to 2000 or more.  They start out with a $200 balance to a department store and in about 6 months they get a real CC with a 500 balance and one to a second department store.  Given at least a decent payment history, that limit could easily increase above 2500 and there could be more then one card open.   Along the lines of what littleadv says, the companies even welcome some late payments.  The fees are more lucrative and they can bump the interest rate.  All is good as long as the payments are made. Getting students and children involved with credit cards is a goal of the industry.  They can obtain an emotional attachment that goes beyond good business reasoning. "Why are banks all of a sudden providing people their credit scores for free? Because it is a really good idea.   On an ABC Bank website, it has:  ""Check your credit score for free"" button.  You click it.  Not only will it come up with a credit score, but it could also trigger a marketing workflow.  If it is direct mail, email, or a phone call a banker could contact you for help with a debt product.  This marketing could also be targeted, say a person with a high score could be targeted for a mortgage.  A person with a low or medium score could be targeted for ways and products to improve their score. Now if you run XYZ bank and not do the same, you are losing a competitive advantage to banks that offer this.  Not only will your customers be less happy, but you will lose a great marketing opportunities.   Face it, the only people that worry about their credit score are people that are in the market to borrow.  Which again, is more information.  If you have someone that never checks their credit score, or has their credit frozen, then it is wise not to market to them debt products." Yes, as long as you are responsible with the payments and treat it as a cash substitute, and not a loan. I waited until I was 21 to apply for my first credit card, which gave me a later start to my credit history. That led to an embarrassing credit rejection when I went to buy some furniture after I graduated college. You'd think $700 split into three interest-free payments wouldn't be too big of a risk, but I was rejected since my credit history was only 4 months long, even though I had zero late payments.  So I ended up paying cash for the furniture instead, but it was still a horrible feeling when the sales rep came back to me and quietly told me my credit application had been denied.