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From the Beginning: What Credit Score Do You Start With?

From the Beginning: What Credit Score Do You Start With?

From age 18, we spend much of our adult lives fixated on two numbers: our age and our credit score.

While age is just a number, your credit score often determines your opportunities in life.

You need a good credit score to land your dream apartment, apply for a mortgage, and even apply for jobs in specific industries. Plus, good credit unlocks opportunities to use financial products, like credit cards, that you can use to further your financial goals and earn rewards.

But what credit score do you start with? And how do you reach a point where you can use credit to your advantage? Keep reading to learn more about how to improve your starting credit score.

When Do You Get a Credit Score?

You can start formally applying for credit at age 18, but it’s not because that’s the age when you get your credit score. Age 18 is when you can start signing the legal contracts needed to apply for loans and credit cards.

There’s no age at which you “receive” a credit score. Everyone starts without one.

You start building credit when you begin interacting with the credit system. It can happen when you open your first credit account (before age 18) or when you apply for loans at or after age 18.

What Credit Score Do You Start With?

The answer to this question depends on the credit score you’re talking about. Remember: there is more than one.

The most widely used score is the FICO ® score, and it’s often what the average consumer refers to when they think about their “credit score.”

The lowest possible FICO ® credit score is 300, but it won’t necessarily be the credit score you start with.

It takes six months of credit history to generate your first FICO score. Most people find their first credit score is a middle-of-the-road one, assuming you manage your credit from the beginning. If you have a credit score and you don’t have six months of credit history, then you may be the victim of fraud. You should check your credit report to look for signs of recently opened accounts in your name. 

Credit scores are usually ranked as follows:

  • Bad: 300-499
  • Poor: 500-619
  • Average: 620-679
  • Above Average: 680-719
  • Good: 720-759
  • Excellent: 760-850

Above average, good, and excellent credit are achievable in one of two ways: 1) over time through a combination of using accounts responsibly and managing your debt-to-income ratio, or 2) adding several high quality credit tradelines to your credit report.

Many young people start with a lower credit score than their parents might have had. While everyone makes mistakes while learning about credit, today’s’ young people are also forced to deal with student loans and the high balances they carry, which negatively impacts your credit.

How Is a Credit Score Calculated?

Once you’re off and running, you need to manage your credit score. Every time you interact with the system (whether you pay a bill or make a big purchase), you have an opportunity to improve it (or lower it).

None of the credit bureaus are willing to share how they calculate scores. We do know that credit bureaus consider actions like:

  • Payment history (do you make on-time payments)
  • Balances (do you max out your credit cards)
  • New credit (how often do you apply for new credit)
  • Types of credit (do you have a good mix of credit cards versus loans)
  • Length of history (how long have you had access to credit)

In other words, making on-time payments, keeping your revolving balances low, and taking out new types of credit every once in a while add to your credit score (in theory).

Even when your history is the same across the board, the three major credit bureaus may calculate it differently and give you a different score. However, FICO does share how it weighs each factor:

Remember that the types of credit don’t just include credit cards and personal loans. The new FICO score (as of 2015) also incorporates consumer payments like cellphone bills and utility bills to help consumers without access to credit products like credit cards build credit. (The 2015 announcement also noted that FICO considers how often you change your address.)

However, this is still not enough to get people with no credit (or those with high debt-to-income ratios) access to traditional products.

Does Piggybacking Tradelines Build Credit?

Creditors don’t like to lend to people without a payment history, but you can’t get credit without one. The options for people with low or no credit aren’t much better: secured credit cards and loans defeat the purpose of using credit.

One way to establish real credit is to “piggyback” on credit tradelines.

When someone with a credit card adds another authorized user to their card, they are “piggybacking” credit or tradelines. It is a constructive way to add positive credit history and allow you to build credit.  

Plus, it’s now a more accepted form of building credit. In Congressional testimony, FICO confirmed that it would include authorized user tradelines in the new FICO model.

At the same time, you also need to be careful. Because FICO now recognizes the value of piggybacking, you need to be careful the types of tradelines and what tradeline supply company you purchase from.

It’s important to enter these agreements with a person – or tradeline company – you trust.  Make sure to check out any guarantees and reviews the company has received.

You Can Build Credit Fast

What credit score do you start with? It’s difficult to say because nobody starts with the same credit score. After six months of interaction, you get a number based on your accounts, your debt, and your payment history.

Getting access to credit with no credit or a bad credit history is difficult, which makes it hard to build your credit. But you can boost your credit score fast by using credit tradelines to benefit from other people’s great credit using BoostMyScore.

BoostMyScore uses credit tradelines to help you rise through the ranks fast so that you can go on to build a stellar credit history all on your own. Are you ready to learn more? Check out our FAQS and the credit tradelines simulator to assist you in selecting the right tradelines for your situation.  Still need help?  Contact BoostMyScore for a free consultation with one of our credit experts at 1-800-531-1472.

Bill Airy

About the Author:

Bill Airy is the CEO and Founder of BoostMyScore. For over 12 years he has helped American consumers get a second chance at a better financial life by helping them to improve their credit score. He regularly publishes helpful content on this Blog to educate others about Credit Scores and best practices when trying to improve them.

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BoostMyScore Team