At the beginning of building up your credit, you might wonder what credit score you start with and what credit score you start with at 18. Even if you start with no credit history, your credit score ranges from 300 to 850.
If you want to find out more, continue reading this article that tells you all about credit scores.
Several factors affect the credit score outcome. These will determine whether you will get you into the good credit score range or put you in the lower range.
Let’s take a look at these determining factors:
The answer is no. As briefly mentioned above, your credit score can never start at zero. This is the case because a lender calculates your credit score when you want to apply for a loan. Additionally, your credit card issuer often completes this process to check out your creditworthiness.
When this procedure starts, the card lander or other entity will look for a credit score that mirrors how you are dealing with your credit accounts.
When you are starting to build your credit history or just turned 18, your actual credit score does not exist. However, it's important to have one because lenders have to know whether you can repay your debts.
You have to start somewhere, and usually, credit scores begin at 300. However, taking your credit habits into account, it is not likely that your very first credit score will be at the lowest rate.
To determine the start of the credit score, the most commonly used scoring models are FICO and VantageScore, FICO being the lowest one that starts at 300 and VantageScore being the one that goes up to 850.
Having established a credit score background will allow you to apply for more favorable loans that you might need. It is a huge factor when it comes to mortgages for example.
For a credit score to be considered good, it has to fall between 690 and 719 if the FICO® credit score is used. However, according to the VantageScore® method, a good credit score lies between 661 and 780.
All of this implies that if you get a good credit score, the lender immediately determines the likelihood to pay out what you owe is guaranteed. On the contrary, 300 credit score loans fall into the poor score category according to both FICO Credit scores and VantageScore. Lastly, anything from 800 and above is considered an excellent credit score.
Building credit for the first time takes time. Make sure to go through our detailed guide for building your credit score.
What credit score do you start with if you have no credit history? We already know that you cannot start your credit at zero, so the first thing you need to do is find a way to build your credit. Some of the most effective and efficient ways that will help you build credit include:
Accordingly, if you are building your credit for the first time, you might consider a credit builder loan. This will help you complete fixed payments to your lender, thus, gaining access to the determining loan amount.
The credit builder loan works in quite a simple way. The lender will set aside the money if you get an approved credit builder loan application. Then, you will proceed with making monthly payments, and the lender will report said payments to credit bureaus. If you have completed all of your payments on time, just by the end of the loan’s term, all of the funds will be available for you to use.
Once the procedure for building your credit history begins, you will have to follow several simple steps to further help you get into the good credit score category.
These steps include:
To prove your creditworthiness, you will have to request a credit report. You can make your request for a copy of your credit report at one of the three major credit bureaus: Equifax, Experian, and TransUnion. You can submit your request once a year.
To build credit from scratch, the first thing you will need to do is to establish your credit history. You can do this by opening an account, getting a credit card, starting a loan, or becoming an authorized user on a credit card.
Your overall credit history determines your starting credit score. This implies that you might have to wait for at least six months or longer to get into the good-to-exceptional range of credit scores.
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