What Credit Score Do You Start With, Really?

If you don’t have a credit score or have recently opened your very first credit account, you are probably wondering what your credit score starts at. It seems like you would start at zero and build up from there. The reality is that major scoring models don’t begin at zero.

If you’ve never used credit before, you won’t even have enough information in your credit file for a score to be calculated.

You don’t begin with a preset number. Your score is created after you’ve engaged in enough credit activity, and that activity has been reported to the major credit bureaus, which are Experian, Equifax, and TransUnion.

What credit score do you start with?

One of the most common questions about credit is, "What does your credit score start at?” The answer is you don’t start with any score at all. If you don’t have adequate reported credit activity, your file is unscoreable. There isn’t a universal number that everyone receives when they turn 18 or open their first account.

Instead, lenders report your credit activity to the credit bureaus. Once there’s enough information in your file, a credit scoring model can calculate your first score based on your financial behavior. FICO is the most widely used model, and it runs from 300 to 850.

Why you don’t start with a zero credit score

Some people believe that their credit score starts at zero. That’s a myth. FICO and other major scoring models like VantageScore have a range. FICO and VantageScore both run from 300 to 850. You can’t have a score outside of that range.

Credit bureaus don’t generate a score until you build up enough information in your credit file. You simply don’t have a score until then. Your first score is based on the information that’s reported about your credit activity.

How your first credit score is generated

The credit bureaus can calculate a score for you once lenders have reported enough information about your financial activity. The reporting process begins when you open your first credit account, such as:

• Credit card
• Student loan
• Auto loan
• Credit-builder loan
• Retail store card

As your lender reports your payment history, account balance, credit limit, and other account details, the credit bureaus build your file. Once the scoring model has enough information, it generates your first score.

Everyone starts with different credit accounts and payment histories, so no two people necessarily receive the same initial credit score.

The minimum scoring criteria

FICO outlines the minimum requirements that your credit report must include to receive a valid FICO score. You’ll need all of the following:

• At least one account that a lender has reported to a credit bureau within the previous six months
• At least one account that is six months old or older
• No “deceased” indication on the report

You can meet the minimum criteria with one account or multiple accounts. Other credit scoring models share similar criteria, although the exact requirements may vary.

How long it takes to get a credit score

After you open your first account, it will take at least six months before you receive your initial credit score. There can be a slight lag between when you open your account and when your activity is reported to the credit bureau. As a result, some consumers may not see a score until seven or eight months after they open their account.

During this initial reporting period, it’s vital that you make every payment on time. Don’t rack up a high credit card balance. Your utilization rate, which is the percentage of available credit you are using, is one of the factors used to calculate your score. If you max out your credit card, it could negatively impact your credit score.

What affects your starting credit score?

When the scoring models crunch the numbers to give you your first credit score, they consider the following factors:

• Payment history
• Credit utilization
• Types of credit
• Length of credit history
• New credit applications

The types of credit and age of your accounts will be working against you when you first begin building credit. That’s why it’s especially important to make all payments on time and keep your utilization rate low.

How to build your credit score from the start

Building good credit is all about consistency. Here are some ways to come out of the gate strong:

• Pay every bill on time
• Keep your card balances low
• Avoid applying for unnecessary credit accounts
• Leave older accounts open when possible to increase your average age of accounts
• Monitor your credit reports for errors
• Consider using a credit-building product

The sooner you begin practicing these habits, the easier it is to qualify for lower interest rates and better loan terms. Kikoff is a great resource to support your journey. Our credit-building platform includes free and paid tools that can add positive payment history to your credit profile. Sign up today.

What credit score do you start with? A final recap

You don’t start with a fixed credit score. You have to build it one month at a time. Be patient and focus on adopting responsible habits like paying bills on time and keeping balances low. Using your credit wisely can help you establish a strong credit history from the very beginning.

Kikoff is a great resource to support your journey. Our credit-building platform includes free and paid tools that can add positive payment history to your credit profile. Sign up today.