What credit score do you start with

What Credit Score Do You Start With?

How to improve credit score

Eduardo Monroy

January 23, 2023
What credit score do you start with

When you first begin, the world of credit can be scary and perplexing. You may be curious about why having a credit history matters. Do we all start with poor, excellent, or no credit score at all? 

The starting point for credit scores given by the three credit bureaus is 300. After receiving your first credit product, such as a credit card or school loan, you normally start building a score.

Making your payments on time is one way to improve your credit score, or there are credit repair companies that can help. Depending on how well you manage your credit throughout the first six months, your credit score could increase from 500 to 700.

What is your initial credit score?

You most likely don’t have any credit history because you’ve never used credit of any kind. Since your payment history and credit utilization make up your credit score, unless you get your first credit product, these variables won’t start to take effect.

How fast you can get your credit score depends on the credit scoring model. You can calculate your VantageScore score as soon as your first credit account appears on your report. On the other hand, to obtain a FICO credit score, the account must be open for at least six months. The initial credit score in both situations is 300.

How is credit score calculated?

A credit score is calculated based on your credit report. There are a few factors to keep in mind while calculating the score.

1. A good payment history

The most important factor that influences your credit score is your payment history. It accounts for 35% of your FICO score, highlighting the relevance of paying your bills on time. This determines whether you are a good candidate for credit or not.

Credit bureaus also consider your previous bankruptcies, collections, and late payments. Your credit score will decrease with more payment issues in your credit history.

2. The ideal ratio of credit utilization

This is the portion of your available revolving credit that you are currently using. It divides your current amount of revolving credit by all available revolving credit limits to determine your credit utilization ratio. 

The ideal credit utilization ratio is under 30%, which is possible if you keep your balances as low as possible. Credit utilization accounts for 30% of your FICO score. 

3. The term of your responsible credit history

Your credit history attributes to 15% of your FICO score. The longer your credit accounts have been active and in good standing, the better. 

A borrower who has made payments on time for 20 years will be seen as less risky by lenders than someone who has only made payments two years in a row.

4. Credit mix and diverse borrowing history

Your credit mix, comprising two different types of credits, accounts for 10% of your FICO score. Installment credit is a loan, mortgage, or a predetermined sum that you must pay each month. 

Then there’s revolving credit, which allows you to pay certain credit amounts and either pay it in full each month or carry it forward as long as you keep making small payments. It shows the lenders that you are a responsible borrower.

5. Your new credit accounts and inquiries

Your new credit accounts and the number of hard inquiries on your credit report make for 10% of your FICO score. 

A hard inquiry is when a lender evaluates your credit report to decide on your application. Several hard inquiries within a short period can hurt your credit score.

What Is the Perfect Credit Score?

Even though ranges differ based on the credit scoring model, generally speaking, credit scores between 580 and 669 are fair, 670 to 739 are good, 740 to 799 are very good, and 800 and above are exceptional. 

A higher credit score indicates that you are a responsible borrower, which may provide prospective creditors and lenders more assurance when assessing a credit request.

How Can I Build Credit from Scratch?

Building credit from scratch is possible, and getting started can put you in a better position to achieve your financial objectives in the future. Here are four strategies to begin establishing credit right away.

1. Become an authorized user

It may be hard to get loans or credit cards if you don’t have a history. One method of establishing credit without applying for your credit card is to become an authorized user on a family or friend’s card. You are added to the primary cardholder’s account as an authorized user and given your card.

Your credit report will include the credit card account and its payment history, allowing you to build a credit history and score. You should only add yourself as an authorized user on a card if the principal cardholder maintains a low credit utilization amount and has a good payment history.

2. Apply for a secured card

A great strategy to establish credit is to apply for a secured credit card. Due to the requirement of an initial deposit that “secures” your credit line, secured cards are often easier to qualify for than conventional unsecured cards.

3. Apply for a store card

In contrast to other types of traditional unsecured credit cards, credit cards given by retailers are typically easier to apply for. If you buy there frequently, getting a store card could help you establish credit while purchasing. Store cards typically have higher interest rates than other types of cards. 

4. Have rental payments reported

Rent payments made on time each month may also help you establish credit. Just like utility payments, rental payments normally do not appear on your credit report. However, you can request that your landlord or the property management firm report your timely payments.

Is no credit worse than bad credit?

Honestly, the situation is the other way around! Lenders mostly prefer people with no credit score over people with bad credit. Lenders prefer to give loans to borrowers with good credit histories, in the case of unsecured loans like personal loans. 

You will be seen as a risk because you don’t have a good track record even if you have a regular salary. Because you’ve made some serious financial blunders in the past, lenders are hesitant to issue credit.

You can turn your no credit into a good credit score, by becoming an authorized user, applying for secured credit, and asking the landlord to report regular rental payments to credit bureaus. 

However, you can go for credit repair services to improve your bad credit score. Look out for the best credit repair companies to get help. 


Starting your journey in the credit world may seem complex, but with a disciplined and responsible approach, you can improve your credit score. A good credit score can open a world of opportunities for you to secure a better financial future. 

If you already have a credit score but struggling to improve it, you can easily restore it with Cool Credit, a credit repair solutions provider. It allows you to get credit education and take the necessary steps.

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