What your credit score starts at can be a deceptive question when asked directly. In reality, you don’t automatically have a credit score at birth, nor do you acquire one upon turning 18.
You must fulfill a few prerequisites in order to be qualified for a credit score in the first place, in accordance with the guidelines of the widely-used FICO® credit scoring technique. You won’t need to worry about “What does your credit score start at?” until you fulfill those standards.
So, once you’re approved for one, what does your credit score start at? Let’s look at it.
At What Point Does Your Credit Score Begin?
If this is your question, then you don’t need to worry because the solution is simple and easy. There is no set score that everyone starts with because everyone’s credit path is unique even though the starting point for credit scores given by the most widely used credit-scoring models in the U.S. is 300.
While 300 may be viewed as the point where your credit score can begin, unless you’ve had some recent trouble with on-time payments or high spending, your score likely won’t be that low. Furthermore, one strategy to raise your credit score is to make your payments on schedule. Your credit score could rise from 500 to 700 during the first six months, depending on how effectively you use your credit. Going forward, it often takes years to reach an excellent credit score of over 800 because the average age of your credit plays a role in your score.
What Credit Score Do You Start With at 18?
When a person becomes 18 years old, their credit scores do not suddenly emerge. You must be at least this old to apply for your first type of credit, though. Also, keep in mind that there is no default credit score. People who are over 18 can establish credit in a variety of methods. Obtaining student or secured credit cards, adding authorized users to other people’s credit cards, paying off student loans while still in school, and having utility, phone, and rent payments appear on credit reports are a few examples. 18-year-olds should anticipate their credit ratings to reach 500 during the first six months if they practice good credit habits. Poor credit management, however, may lead to noticeably worse scores.
How to Build and Keep Good Credit
Credit building takes time. However, here are just a few strategies for establishing credit for the first time:
- Make a credit card application: You might want to think about applying for a secured credit card if you don’t have any credit history. Secured credit cards require a security deposit from you in order to start an account. Additionally, improving your credit through the prudent use of a secured card can help you qualify for financing for things like homes, cars, and even additional credit cards.
- Obtain authorization to use: The foundation of credit scores is a cumulative experience. Being added to an account as an authorized user of someone with good credit, such as a friend or family member, may therefore help you establish your credit history. You are able to make purchases once you are an approved user. However, payment obligations ultimately rest with the primary account holder. If the issuer discloses the action to credit bureaus, being an authorized user can enable you to have access to the credit history of the primary account holder. However, unfavorable activities might also be recorded, which might impact both the credit of the primary account holder and your own.
- Get a loan to improve your credit: You can establish credit by taking out small loans from credit unions. You repay the loan over a certain period by making tiny payments into the lender’s locked savings account. To assist you in establishing credit, payments are recorded to credit bureaus. You also have access to the funds in the savings account once the loan has been repaid.
Your Initial Score Does not Represent Your Final One
Remember that there are strategies that will support and help you as you begin the process of gaining a better credit score. Think about keeping an eye on your credit record to observe how your most recent debt affects your scores. You can check your VantageScore 3.0 credit score with the help of CreditWise from Capital One, which is a free service. You can also get free copies of your credit reports from all three major credit bureaus—Equifax, Experian, and TransUnion.
What Is the Common Beginning Credit Score?
Although the starting point for VantageScore and FICO scores is 300, it’s doubtful that you will begin with such a low score. The lowest end of the credit score range indicates major flaws in a person’s credit usage, and it is exceedingly unlikely that someone will reach this point at the start of their credit history. Instead, your initial credit score could be somewhere in the 500 range, depending on how effectively you manage your credit. Your credit score is influenced by the age of your oldest credit line.
However, improving other areas may possibly enable you to raise your credit score above the initial 700 mark. For instance, while paying off your first credit card on schedule helps to raise your credit score, other elements like the sums owed, the variety of credit you have, and your credit applications also come into play.
What Is the Optimal Credit Score?
850 is the ideal credit score according to the FICO or VantageScore models. While there is no set route to achieving a flawless credit score, those who fit this category frequently exhibit a few common characteristics like
- Long credit histories: The majority of persons with excellent credit ratings have long credit histories. Their oldest accounts are 30 years old on average.
- No missed payments: People with flawless credit scores don’t have any negative information on their credit reports, such as missed payments, collections action, or other types of negative information.
- Low credit utilization ratio: According to FICO, individuals with impeccable credit are advised to keep an average credit amount of $13,000, excluding mortgage obligations. Their average credit utilization rate is only 4.1%, though.
- Minimal credit inquiries: People with credit scores of 850 occasionally receive new credit. According to the FICO data, while about 10% of those in this group had at least one credit inquiry in the year prior, about 25% of them created at least one new credit account during that same time.