What Credit Score Do You Start With?

If you haven’t taken out debt or opened a line of credit, you won’t have a credit score. You’ll have enough credit history to generate a score when you’ve had a credit card or loan for six months. But your score won’t start at zero, or even the lowest FICO score (300). Your first credit score will likely fall somewhere in the middle of the credit range of 300 to 850. The exact number will depend on how you handle your credit.

What’s a credit score?

A credit score measures your creditworthiness, or how likely you are to repay debt. Lenders use it to decide whether to approve you for credit cards, loans and mortgages. Your score will also determine your interest rates. The better your score, the lower your interest rates — and the less you’ll pay to take out loans or maintain a balance on your credit card.

Lenders report your payment history to the three credit bureaus: Experian, Equifax and TransUnion. The bureaus use this information to create your credit report and to calculate your credit score. You have two credit scores: FICO and VantageScore.

How is your credit score calculated?

While the exact formula is a trade secret, the credit bureaus have identified the factors that determine how your credit score is calculated. There are five key criteria that decide your FICO score:

• Payment history (35%): Late or missed payments damage your credit the longer you wait to pay off your balance, while a history of making payments on time is essential to good credit.
• Amount of debt (30%): Using a small amount of your available credit and paying off your balance every month will improve your credit. Your credit utilization ratio — how much credit you use compared to how much you have access to — is one of the key factors that make up your credit score.
• Length of credit history (15%): Having credit for a long time boosts your credit score, since you’ve established a history that lenders can rely on. This is why experts often recommend keeping old credit card accounts open.
• New credit (10%): Applying for several credit cards or loans in a short period of time is a red flag. Each application will result in a hard inquiry and a small dip in your credit score, but credit bureaus do make exceptions for rate shopping.
• Credit mix (10%): Having a mix of different kinds of credit — like personal or car loans, credit cards and a mortgage — shows that you’re responsible enough to juggle several financial accounts.

How to get a credit score

If you don’t open a credit card or borrow a loan, you won’t have a credit score. This is called being credit invisible. Fortunately, you’re better off having no credit at all than starting with bad credit.

To get a credit score, you’ll need to take out some form of credit or debt, like a car loan, credit card or student loan. Once you’ve had that account for six months, the credit bureaus will have enough data to generate a FICO score. It’ll take less time — as little as one month — to get your VantageScore.

You can check your credit score (or see whether you have one) for free with LendingTree Spring. No need to worry about damage to your score, either. Contrary to popular belief, checking your credit doesn’t damage your score.

How to build credit with no credit

If you’re wondering how to start credit with no credit, you have a few options. One of the best ways to build credit from scratch without having to take out a loan or get a credit card yourself is to become an authorized user on a family member’s credit card.

You can also build credit by getting a loan or a credit card. It may seem impossible to qualify for a credit card or meet personal loan requirements without a credit history, but there are loans and credit cards designed for people with no credit.

How to get a loan with no credit

If you have a trusted family member with good credit who is willing to cosign your loan, your odds of approval will skyrocket. You can also consider credit-builder loans and secured loans.

Credit-builder loans are exactly what they sound like: loans that help you build your credit score. If you’re looking for a way to start credit from scratch, a credit-builder loan could be your best bet.

If you need money to pay off an expense, you could use a secured loan to cover your costs and build your credit. Secured loans are some of the best loans for no credit history because their credit requirements are often lower than those of regular (unsecured) loans. Lenders are more lenient with secured loans because they can take your collateral if you don’t pay off your loan.

How to get a credit card with no credit

You can qualify for a credit card even if you don’t have a credit score. Secured credit cards have lower credit requirements than other credit cards because they’re backed by a security deposit. Since the credit card company can take your deposit if you don’t make payments, they’ll be more likely to accept your application. After several months of on-time payments, you may be able to upgrade to a regular credit card.

If you’re in college, a student credit card will likely be your best option. Student credit cards are designed for young adults, so they typically come with credit-building tools and cash back rewards in categories like restaurants and entertainment.

There are credit cards with no credit check, but they often come with expensive fees and high interest rates. You’ll likely be better off with a secured or student credit card.