What Credit Score Do You Start With?

Before you have a credit score … well, you have no credit score. It’s not zero, it’s not 300 – which is usually the lowest score you can have – it’s just nonexistent. While this is good news because it means you don’t have to build it up from zero, there are things you should know so you can start your credit score in a good range and keep it there – or even raise it.

The process for how you get a credit score isn’t obvious, but understanding it helps explain why it takes six months. Establishing a credit score involves two steps:

• Collecting data about a person’s borrowing and repayment habits.
• Applying that data to a “scoring model” whose algorithms aim to help lenders assess whether that person is likely to miss any debt payments over the next two years.

Data collection is done by three major U.S. credit bureaus: Experian, Equifax, and TransUnion. And there are two major scoring models: FICO, from Fair Isaac Corp., and VantageScore, from VantageScore Solutions, which is jointly owned by the three credit bureaus. 

FICO, which is the model used by most lenders, requires at least six months’ worth of your financial data to generate the credit reports needed to calculate your score. Until then, you’re considered “credit unscorable” or “credit invisible” – in other words, you’ll have no credit score.

If you want to start with a good credit score, make sure you demonstrate good financial performance in those first six months. Although the age of your credit is a factor, it accounts for only 15% of your score. If you do well in the other categories, you could find yourself with a good credit score from the start. 

It may sound obvious, but the category to pay the most attention to is making your payments on time – aka payment history – which counts the most toward your credit score. Here’s a rundown of the five credit score factors and the portion of your FICO credit score they influence:

• Payment history: 35%. If you want a good credit score, a consistent history of on-time payments should be your goal.
• Credit utilization: 30%. This refers to how much of your available credit you’re using. The lower your credit utilization ratio, the better.
• Length of credit history: 15%. Time is your friend here. The longer your average account age, the more positive effect it’ll have on your score.
• Credit mix: 10%. This refers to how diversified your credit activity is. A mix of loans and credit cards, for example, equals a higher credit mix – and potentially a higher credit score.
• Recent credit inquiries: 10%. Every time a lender makes a hard inquiry, it could cause a slight ding in your score. The fewer recent inquiries and new accounts opened, the better it is for your credit score.

The credit score you start with depends on your performance in these five areas during the six months before your first score is generated. To learn more about credit scores in general, see “What is a Credit Score and How is it Defined?” If you need to learn how to start your credit from scratch, see “How to Build Your Credit from Scratch – Credit Cards Can Help.”

Now that you know your starting credit score is not zero and that the score you get only depends on your actions, you might be asking yourself what score you should be shooting for. The “good” credit score range starts at 670 for FICO scores, and the overall average FICO score for adults in the U.S. was 716 in 2021.¹ 

People’s starting FICO scores are usually anywhere from about 500 to more than 700 if their individual performances show responsible credit use during their first six months.² At such an early stage in your credit history, that basically means making every debt payment in full and on time, including at least the minimum payment on any credit cards. 

But don’t feel bad if your starting score is not as high as you hoped it would be. You can always build it up over time by continuously practicing good financial behaviors.

If you’re unhappy with your starting credit score, you might be glad to know that it can improve. Knowing what affects your score is the first step to knowing how to fix it. For example, if you’ve missed payments simply because you’re forgetful, consider setting up automatic payments online so you won’t miss any due dates, since payments are what affects your score the most. 

Getting a second credit card or an installment loan can help your score because it shows that you’re able to manage a good mix of credit – but take note that opening a second card or a loan will lead to a hard inquiry and could cause a dip in your credit score. If you do open a second card, it’s important to remember that credit scoring models favor low credit utilization rates. The lower the rate, the more likely it will positively impact your score. Making additional monthly payments can help you keep your utilization rate low, potentially benefitting your score. 

What’s more, new DIY credit reporting tools could enable individuals to write and boost their own credit history by linking payment history for day-to-day expenses like phone and utility bills – expenses that aren’t traditionally reported to credit bureaus. 

Improving your credit score might take time, but it’s achievable with financial discipline.