The real quick answer to this question is “NO” a person with no credit does not have bad credit. However that being said, the effects of both no credit or bad credit can be the same for someone when trying to obtain a loan or get a credit card. Having no credit established often can be just as detrimental.
The good thing for a person with no credit is that it typically is easier for that person to get to a state of good credit as opposed to someone trying to repair their bad credit status.
A lender or a credit card company will use a person’s credit history of payments or their credit report as a means to determine an individual’s credit worthiness. If a person does not have any past history of payments and having already had some type of loans or credit cards, then they basically have what is considered no credit. Unfortunately as I mentioned a person can get turned down for a loan by a lender because they have no established credit. The company has no past history to tell them you are trustworthy to make the payments that will be owed so they opt to not take the risk.
To establish credit is as easy as adding yourself to another family member’s credit card as a co-signor, getting a secured credit card, a student loan, paying your monthly utilities and various other means of establishing a credit history.
The good thing is a person with no credit can quickly become a person with good credit. A person with bad credit can have a much longer recovery to re-establish good credit once again.