When you reach a certain age, you might want to think about your credit score. For example, you can try to answer the question “What credit score do you start with and how high do you think you can keep it in the future?”
Still, what happens if you have never applied for a credit card or taken a loan—do you even have a credit score?
If you’re new to credit and wonder how it all works, keep reading. We’ve covered the answers to the most common questions about credit scores.
Most Common Credit Score Questions Contents
- How is the starting credit score defined?
- Why do all credit scores start at 300?
- How high is a credit score when you’re without credit?
- Does every person have a credit score?
- At what age does a credit score start getting calculated?
- What is a credit score you start with when you’re 18?
- How much time does it take to establish a credit score?
- How high is an average credit score?
What Does Your Credit Score Start At?
The lowest possible FICO score is 300. This means that your credit score starts at about 300. However, there’s no such thing as a starting credit score. As soon as you start using credit cards, the numbers in your report will change.
On the other hand, if you haven’t started using credit, you won’t have any score tied to your name. If you wish to begin building your credit score, you should start by opening the first line of credit—a credit card or student loan. From there on, your credit activity will determine your credit score.
What’s a Starting Credit Score?
There is no such thing as a starting credit score. Everyone around you has been building their score for years, but they started as soon as they got their first credit card. This is because there’s no information about your credit activity until you actually get some sort of loan or credit.
Still, this doesn’t mean you have to start from zero. There are three credit score bureaus (Equifax, Experian, and TransUnion), and each of them has a scoring range that mostly starts at about 300.
Why Do Credit Scores Start at 300?
Learning how to manage your credit score can bring great benefits. This is why you should understand how three credit score bureaus work. If you have just begun getting into credits and have poor payment history, you’ll start at 300.
For example, FICO assigns credit scores in the 300–850 range. The 300 score is considered poor, but since you just got your first credit card or a loan, chances are it will improve once you start building your payment history.
What Is Your Credit Score When You Have No Credit?
Many believe that your credit score is zero if you haven’t had any credit. However, that’s not true. There’s a difference between not having a credit score and having a poor credit score. When you don’t have a credit score, that simply means there’s no available information on your credit activity.
The analytics companies can’t access any information, so your credit score will probably automatically be around 300, or the score won’t be generated. Once you get your first line of credit, the numbers will change.
Does Everyone Have a Credit Score?
Based on the latest data, not everyone in the US has a credit score. Over 50 million people don’t have a score due to the lack of their credit history. In addition, about 25 million adults have no credit history at all, and 28 million have unscored records, likely due to a few credit accounts or new credit activity.
Credit history is crucial for companies that determine the credit score. Unfortunately, it’s also one of the main reasons those with an invisible credit don’t have a score. Moreover, 80% of 18- and 19-year-olds don’t have a score since they lack time to build it.
What Age Does Your Credit Score Start?
In general, your credit score will start getting calculated once you turn 18. This is an ideal time to learn more about how credit scores work and get involved in managing your finances. However, in some rare cases, people under 18 can also have a credit score.
For example, if a child’s identity has been stolen and used to open a credit account, a child can have a credit score. Also, if an adult added a minor as an authorized user, the minor may get a score—at the same time, this is a great way of building a kid’s credit score before they turn 18.
What Credit Score Do You Start With at 18?
When it comes to credit scores, everyone starts differently once they turn 18. In most cases, there won’t be enough credit activity to generate a report, so the data may show the lack of your score. Note that your credit score is not tied to your age but your credit history.
Some agencies will set it to 300, but the best way to know your credit score is to open an account and hold it for at least six months. Then, you should update at least one account during that time and not get flagged as a deceased account owner.
How Long Does it Take to Get a Credit Score?
Building a good credit score takes time and good financial habits. The biggest catch is that you must get credit to start getting a credit score. This means you’ll spend about six months working on your credit rating by opening accounts and building payment history.
Six months is a minimum period needed to obtain a FICO credit score. It might take less for a VantageScore, but the FICO score is generally more important. After the initial six months, it all depends on your credit activity. Sometimes it might take several years to get an excellent credit rating.
What’s an Average Credit Score?
The latest data from 2021 shows that the average FICO credit score rose to 714. In fact, credit scores have been increasing in the last decade. However, the latest numbers show consumers have had significant challenges due to the Coronavirus pandemic.
FICO scores are calculated based on the information from consumer credit reports. This means that when the consumers’ credit profile improves, so do the scores, even though not all changes have a visible impact.
Having a great credit score doesn’t come that easily. If you want to build good financial habits, make sure to work on your starting credit score. As soon as you open an account, the numbers will start getting into analytics, and the credit agencies will calculate your initial score.
The good thing is that you can always improve your score by maintaining a regular payment history and keeping an account open and active.