What Does Your Credit Score Start At?

One of the most common questions young adults ask about credit is: What does your credit score start at? In other words, when you first turn 18 and have no credit cards or other debt, what is your credit score?

Personal finance education isn't universally taught in the U.S., and as a result, many people understand little about credit scores and building credit. Read on to better understand how credit scores are assigned to new credit users.

It's a trick question

At face value, "What does your credit score start at?" can be a trick question. Turns out, you don't actually start with a credit score at all. You're born outside the system. Even when you turn 18, you aren't automatically assigned a credit score.

According to the common FICO credit scoring method, you need to meet some basic requirements to be eligible for a credit score. Until you meet these requirements, you won't need to wonder about "What does your credit score start at?" -- because you have no score at all and are considered credit invisible.

To receive a FICO® Score, you need at least one credit account open for six months or more, plus a credit account that has been reported to a credit bureau within the past six months. You can have more than one account open.

So, what does your credit score start at, once you qualify for one? The FICO® Score ranges from a minimum of 300 to a maximum of 850. But you don't start out with a 300 and work your way up. Instead, your score is calculated using a proprietary formula created by FICO.

What makes up your FICO® Score?

There are five categories used to calculate your FICO® Score, each with its own weight in the formula. Your starting credit score depends on your credit behavior in each of the following categories:

• Payment history (35%)
• Amounts owed (30%)
• Credit history length (15%)
• New credit (10%)
• Credit mix (10%)

Payment history

Payment history has the biggest impact on your credit score. On-time payments keep your score high. But a single late payment can drop your credit score dramatically. If you've never missed a payment before, your score could drop by 100 points or more. To earn a high starting score, pay all your outstanding credit bills monthly.

Amounts owed

Your monthly credit balance is almost as important as your payment history. Keeping your balance low keeps your credit score high. But racking up debt -- even if you make timely minimum payments -- can drop your credit score. To earn a high starting score, keep your credit utilization ratio below 30%. In other words, try to pay off your credit card entirely every month.

Credit history length

Since you're just starting out, you are immediately penalized for having a short credit history. This makes it impossible to begin with a perfect score. Don't worry, though. Your score will naturally improve as you prove to FICO that you can establish a strong credit history. (Your "credit history length" is the average of all your accounts.)

New credit

Each time you apply for a new credit card or a loan, your lender performs a hard credit check. One or two is okay, but too many signals to lenders that you are about to take on a bunch of debt. Lenders don't like that. To earn a high starting score, keep your credit cards and loans to one or two. Take your time opening new lines of credit. If possible, spread them out.

Credit mix

You will probably be penalized for having a poor credit mix. Basically, lenders like to see that you can handle a bunch of different credit lines. It shows responsibility. Ideally, you'd have a mix of revolving credit lines (credit cards) and installment loans (mortgages, auto loans, personal loans, etc.). Don't worry about this yet. It has a relatively low impact on your score.

Because FICO calculates credit scores behind the scenes, and there's a lot involved, it's impossible to know exactly what your credit score will start at. For instance, even if you have a perfect payment history, you may start out with average or "fair" credit because you have limited credit history or a poor credit mix.

Don't worry too much. Unless you make some big mistakes in your first six months, you're unlikely to start with a flat-out bad credit score. Start with a high score by making timely payments and keeping usage to a minimum. There are many ways to establish your credit score.

Bottom line: Your starting credit score will be generated after you've established a credit history, and you can apply for a credit card (and get approved) without a score. Keep your account in good condition to pay less for cars, homes, and anything you purchase with borrowed money.

Still have questions?

Here are some other questions we've answered:

• Does Applying for a Credit Card Hurt Your Credit Score?
• If I Pay Off a Credit Card, Will My Credit Score Change?
• What Credit Score Do I Need for a Chase Credit Card?