If there are no credit scores but there are still loans, the banks / entities making the loans have no real way to know if their loan is going to be paid back. Because of that, the loans are a lot more risky. What happens when a loan is riskier? The interest rate is higher, or people are just outright rejected.
Either or, depending on the risk tolerance of your lender.
A low limit credit card with 0 interest if you pay off in full before it’s due is a great way to build your credit score.
Just buy stuff on it you’d normally buy without credit, then pay it off ASAP. And you’ll build a reliable reputation as someone who can handle credit. Just don’t spend more than you can pay off by the time it’s due.
Also worth mentioning: what’s the alternative?
If there are no credit scores but there are still loans, the banks / entities making the loans have no real way to know if their loan is going to be paid back. Because of that, the loans are a lot more risky. What happens when a loan is riskier? The interest rate is higher, or people are just outright rejected.
Either or, depending on the risk tolerance of your lender.
A low limit credit card with 0 interest if you pay off in full before it’s due is a great way to build your credit score.
Just buy stuff on it you’d normally buy without credit, then pay it off ASAP. And you’ll build a reliable reputation as someone who can handle credit. Just don’t spend more than you can pay off by the time it’s due.
And the likelihood is that the people who are outright rejected will follow unfortunate patterns.