What Credit Score Do You Start With?
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What Credit Score Do You Start With?

Moumita Basu

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You will start to build a credit history and credit score when you start using credit, but what credit score do you start with? Do you start with a credit score if you've never applied for a credit card or borrowed money? What are the best strategies to increase your credit score quickly if you have no credit history?

Don’t worry, we understand that building a credit score for beginners can be intimidating but the right information can help you in building excellent credit from a base credit score. Let’s build a foundation for solid knowledge of how and where does your credit score start?

What is a Credit Score and its Importance?

A credit score is a three digit number that demonstrates your creditworthiness. Lenders look at it first when you apply for a loan or a credit card. It enables them to determine if you have the ability to make timely loan repayments or not. Consequently, it's crucial to keep a high credit score. Making all of your payments on schedule, monitoring your credit reports frequently, paying off existing credit card debt, and keeping your credit utilisation below 30% will help you maintain a good credit score for beginners.

You will have several benefits over people with lower or no credit scores even if you have a credit score starting number. The benefits listed below are yours if you have a good credit score:

  • Better terms and lower interest rates for credit goods

Banks may offer you loans and credit cards at a lower interest rate if you have a high credit score, which is one of its advantages. Additionally, you may be eligible for additional advantages like a lower processing cost and a bigger loan amount.

  • Boost your chances of getting a loan or a credit card

Because you are viewed as low-risk borrowers, applicants with good credit scores have a higher probability of getting accepted for loans and credit.

  • Get your credit card approved for a larger credit limit

You may also be granted a greater credit limit on your credit card if you have a strong credit score. Due to your established creditworthiness, creditors are more inclined to extend you a larger loan.

  • Get a pre-approval for a lending offer

Good credit score borrowers are also qualified for pre-approved loan offers. Banks typically extend pre-approved loan offers to their current clients who have good credit history.

Credit Score Range

If you are eager to know what credit score is considered as good, here is list of FICO scores that fall into the following groups and credit score for beginners from 300 (average starting credit score) to 850:

  • Outstanding: 800-850
  • Excellent: 740–799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 300-579

Your FICO score should be raised above 670 as soon as you can. When you have good credit, it will be simpler for you to get a mortgage, rent an apartment, buy a car, sign up for a new smartphone plan, and other things. You will also be able to apply for some of the greatest credit cards available today.

What is the Starting Credit Score?

Are you also eager to know what number your credit score starts at? Answer is there is no set score that everyone starts with because everyone's credit path is unique. However, you won't begin with a score of 0. Simply said, you won't have any sort of score. This is so that lenders or other entities can establish your creditworthiness before calculating your credit scores.

Even if you've never used credit before, you might be astonished to see a three-digit figure when you check your credit score for the first time. That's due to the fact that your credit score does not start at 0. In actuality, 300 is the lowest possible score offered by VantageScore® or FICO®.

At What Age Does Credit Score Start?

Before turning 18, the majority of people won't have credit records or scores. Typically, in order to open a credit card in your own name, you must be at least 18 years old. There is no way to monitor your credit if you have never utilised credit of any kind. And in many circumstances, that means there could not even be credit reports or scores.

However, as more credit lines or loans are opened in your name once you're qualified to begin borrowing on your own, you'll notice credit scores and reports. In some circumstances, if you're added as an authorised user to someone's account, you'll also see scores and reports in your name.

How is Credit Score Calculated?

It's critical to grasp how credit ratings function in order to build an excellent credit score. FICO relies on five categories, and each is assigned a fixed percentage value.

  • Payment History: 35%
  • Credit Utilization: 30%
  • Length of Credit History: 15%
  • New Credit: 10%
  • Credit Mix: 10%

Let's explore the details of these five element:

  • Payment history:

As soon as your credit reports are submitted to bureaus, you will start building history. Your ability to make on-time payments for your bills is the single most critical component in determining your credit score. Never missing a payment is crucial since it affects your FICO® Score, which is based in part on your payment history.

  • Credit Utilisation:

How much of your available revolving credit you are using is referred to as credit utilisation. Your credit usage ratio is determined by dividing the total of all of your revolving credit limits by the amount of revolving credit you are presently using. Maintain balances low or to keep your credit usage ratio under 30% overall and on each individual credit account. Your FICO® Score is 30% based on how much credit you are using.

  • Length of Credit History:

Credit history duration accounts for 15% of your credit score is determined by how long you've had credit. This considers both the average age of all your open accounts as well as the age of each account listed on your credit report. Longer credit histories provide credit bureaus more information about you, which typically translates to higher credit ratings.

  • New Credit:

10% of your credit score is determined by the number of new credit accounts you've lately created as well as the amount of hard queries on your credit report. When a lender checks your credit report to inform their decision on your application, this is known as a hard inquiry. A high risk is indicated by multiple recent hard inquiries, which can lower your credit score.

  • Credit Mix:

There are two primary credit categories. Installment credit involves taking out a fixed-amount loan and paying it back over a certain period of time. This type of credit includes vehicle loans, personal loans, mortgages, and school loans.

Revolving credit, on the other hand, lets you spend up to a predetermined credit limit and choose whether to pay it off completely each month or carry the debt forward as long as you make the minimum payment. Revolving credit includes, but is not limited to, credit cards, store cards, and home equity lines of credit. Your credit score will increase if you can demonstrate your ability to responsibly manage various credit account kinds. 10% of your credit score is determined on your credit mix.

Do you start with a perfect credit score? No…but relief for you is that your credit score doesn't begin at 0 initially. However, regardless of where your score is now, using credit responsibly will help you establish a credit history, raise your good starting credit score, and maintain it as high as possible. Start building your credit with Zolve Credit Builder Card which helps you build credit.

Frequently Asked Questions(FAQs)

Does your credit score start at 0?

No, the credit score does not start with zero. Whenever you start your credit journey, it will start with a credit score. Everyone starts with different scores. However, you won't begin with a score of 0.

What credit score do you start with?

Some individuals are curious as to whether everyone has a credit score of 300 or if the beginning point is zero (the lowest possible FICO score), so the answer is there is no fixed  "good starting credit score," for all. Based on how we utilize credit, each of us develops our own starting credit score.

What age does your credit score start?

Typically, when a person becomes 18 years old, their credit scores do not suddenly emerge. There is no default credit score at the beginning, but people over 18 can establish credit in various methods. Among these are obtaining student or secured credit cards, adding authorised 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.

What is the credit score of a person with no credit?

A person with no credit often has no credit score.

How are credit scores determined?

Your payment history, the due amount, and how recently and frequently payments were missed are  factors taken into account by credit score algorithms. Your credit history will also reveal how many of your credit accounts have been past due about all of the accounts you have on file. In this manner, your credit score will be determined.