If you have no credit history, creditors may treat you the same as if you have bad credit. This may seem unfair, but the reason is that you have not established a history to show that you have the discipline to make payments over an extended period of time.
Score parameters: The credit score of every person is different and is an evidence to varied credit behaviour. The credit score is not a permanent one. It is extremely dynamic and keeps changing as a person changes his financial behaviour.
The score is calculated based on the person's credit profile parameters at that point in time. It is important to know that the following parameters are taken into consideration while calculating a consumer's credit score:
Credit Utilization: How much credit is this customer using? Consistent high utilization of the credit limit is unfavourable, and vice versa, the lower your credit utilization, the better as it suggests that one is using a small amount of the credit that's been provided to them.
Defaults/Repayment History: how many accounts are past due - by how many days and by how much? If you have already taken loans your payment history is the most important factor that determines your credit score. Regular repayment of loans means you are awarded a higher score. If you have missed payments, delayed or defaulted on payments, your score will be much lower.
Secured versus unsecured loans: If your credit portfolio has a higher percentage of secured loans (auto loans, home loans), your credit score will be higher. If you have a large number of unsecured loans (credit cards and personal loans) it shows bad money management and results in a lower score.
Credit Inquiries: If you have too many inquiries to lending institutions for any kind of credit facility, no matter that you have been granted the loan, then it reflects poorly on your credit score. It shows that you are in constant need of funds.
Credit Age/Trade Attributes: How old are this consumer's lines of credit? What type of credit does he have? Does the consumer have a good mix of credit or is it all credit cards?"
Note: Courtesy from CreditVidya.com