What is your starting credit score and how do you build your credit?


Your credit score reflects your responsible use of credit. If you have never used credit, for example through a credit card or even a student loan, then there is nothing to score. You won’t start with a zero score; you simply won’t have a recorded credit score.

There are several ways to obtain a credit score, but it can take up to six months to become assessable. Think of this time as an opportunity to show the credit bureaus that you know how to manage your money. With the right advice and the right tools, and a little patience, you can establish a good credit score that will open the doors to the best borrowing options for your future.

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What credit score do you start with?

Everyone starts with no credit score. Think of it as the start of a new class at school where you haven’t finished the homework yet. You don’t start with an A+ or an F. It’s not a bad credit score, there just isn’t enough data to generate a grade yet.

Generally, obtaining a credit score takes place according to the following steps:

  1. You apply for credit or use an alternative strategy, such as qualifying your utility payments on time with Experian Boost

  2. The credit issuer or lender sends information about you to one or more of the three major credit bureaus

  3. This credit bureau opens a credit report for you in their system

  4. When someone requests information from your credit report, including yourself, it is organized into a credit report, making it easier to assess the information.

  5. Once you’ve made several payments and there’s enough information on the credit report to generate a score, potential lenders may request that score to assess your creditworthiness.

The time it takes depends on the credit scoring model used. For example, to get a FICO credit score, you will need at least six months of credit history. Generally speaking, that first credit score won’t be the lowest or the highest, but will start somewhere in the middle and improve with the right habits over time.

What are the three major credit bureaus?

Credit bureaus are the companies that create credit reports from financial information, such as your payment history, and provide them to entities seeking to assess you. You can find a complete list of consumer reporting agencies from the Consumer Financial Protection Bureau, but the three most common credit bureaus you should be aware of are:

  • Equifax

  • Experian

  • Transunion

Not all lenders and credit originators report to the three bureaus. Since each of these credit bureaus may have different information about you, your credit report with each may look slightly different. You can get a free copy of your credit reports for all three agencies from sites such as AnnualCreditReport.com.

What are the different types of credit scores?

Credit reporting companies take information from your credit report and apply mathematical formulas to create a credit score, which is a snapshot of how accountable you have been for using credit.

Each credit rating company uses a unique rating model and also uses different versions of that credit rating model for different purposes. Because you have several different credit reports and several different scoring models are used to calculate your credit score, you can technically have multiple credit scores.

However, the most common credit scoring companies you should be aware of are FICO and VantageScore, as these are the companies lenders and credit issuers work with the most. FICO scores are the more popular of the two.

How to build credit?

You build credit by demonstrating your ability to use it wisely. There are several ways to do this.

Open a credit card

If you don’t have a credit history or have bad credit, you may not qualify for the best credit cards yet, but there are several beginner credit cards you can use to get started. to build up your credit. And these cards often have no annual fee.

Students can often qualify for unsecured cards, while secured cards are a good option for non-students with no credit history. Most credit issuers will allow you to switch from a secured card to an unsecured card if you use your credit card responsibly for a period of time.

Good first credit card comparison for beginners

Become an authorized user on someone else’s credit card

Another option is to ask a parent or other creditworthy family member or friend to add you as an authorized user on one of their credit cards. This is a big ask, as they will give you access to their line of credit while they are still legally responsible for paying off the balance (possibly at a high interest rate) if you don’t.

As an authorized user, you will get your own credit card to make purchases (assuming the primary cardholder authorizes). Reach an agreement with the cardholder on how (or if) you will reimburse them for the funds you use, and on what schedule.

As long as the primary cardholder doesn’t miss payments or have a high balance, and as long as the credit issuer reports authorized user activity to the credit bureaus, your credit score will improve. will upgrade as an authorized user. This method works whether or not you buy something with the card.

If the primary cardholder gives you a credit card to use, you’ll want to have a deal with them ahead of time to avoid damaging your personal relationship. Set clear guidelines on how much you’re allowed to spend and how (or if) you’ll reimburse the primary cardholder.

Use a service such as Experian Boost and Experian Go

If you live alone and regularly make on-time payments for your utility bills, telecom services, and streaming subscriptions, then Experian Boost is a free service that can help you get credit for those payments to improve your FICO-score.

Experian Go is an app that can recommend the best path to build a credit report, including using Experian Boost. According to an Experian study, nearly half (47%) of Experian Boost users without a credit score became assessable after using the service. Most received an average or poor credit rating, but 15% received a good credit rating or better.

It is important to understand that this service will only work to your advantage if you have been responsible for your bills. If you’ve been late paying your phone bill multiple times, let your past be your past and find another way to build up credit, like applying for a secured credit card.

What factors affect credit score?

Although different scoring models weigh these factors differently, you can expect the following to impact your credit score:

  • Credit history: Credit reporting companies assess how long you have had access to credit, as well as the average age of your credit accounts. To maintain an excellent credit rating, avoid closing old accounts.

  • Late payments: If you have missed payments or paid late, this will result in a negative mark on your credit report and a drop in your credit score. Make sure you always make your payments on time.

  • Credit utilization rate: This refers to how much of your available credit you are using. For example, if the total credit limit on all your accounts is $10,000 and you have a balance of $2,000, your credit utilization rate is 20%. The lower your credit utilization rate, the better your credit rating will be.

  • Difficult credit applications: When you apply for new credit, it involves a thorough investigation of your credit report. Having too many difficult requests in a short time can hurt your credit score. Avoid requesting new accounts too close together.


How often should you check your credit report?

The Consumer Financial Protection Bureau recommends checking your credit reports at least once a year to check for errors. It’s also a good idea to check your credit report before applying for a home or car loan, and before applying for a new job, so you know what to expect.

Because checking your credit yourself has no impact on your score, you can check it more frequently if you want to track your progress.

What is a good credit rating?

What is considered a “good” credit rating depends on the rating model used. For FICO scores (which is the most common scoring model), a good score is between 670 and 739. For VantageScore, a good score is between 661 and 780.

Some lenders and credit card issuers require you to have a credit score in this range before extending credit.

Can you see your credit score for free?

Yes, if you register for certain services. For example, you can get your Experian credit report and FICO score for free directly from Experian. You can view your Equifax and Transunion credit reports, as well as your VantageScore, from Credit Karma.

Some credit card issuers, such as Capital One, also offer services that let you check your score for free, whether you’re a customer or not.

Note that free credit score services generally require you to provide your contact information and receive credit offers relevant to you.

Although anyone can get a free, unconditional credit report each year from the three major credit bureaus at AnnualCreditReport.com, these reports do not come with a credit score.

At the end of the line

Having a good credit score and knowing the basics of credit scoring is important for various life stages, from renting an apartment to car insurance. A good credit rating is also essential to accessing an affordable mortgage.

Starting out without a credit score can be frustrating because it makes those life changes difficult. And the fact that you need a credit history to access credit is a bit of a trap. But starting out without a credit history is an opportunity to establish the financial habits needed to have a good credit score.

Whether you apply for a credit card, become an authorized user, or sign up for Experian Boost, you should become evaluable in about six months. Just make sure you make your payments on time and keep your credit utilization rate low so you can keep improving your score over time.

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