We all start with no credit score at all. As soon as we turn 18 and are eligible to apply for a loan, our credit history begins. First loan application appears on the credit report and starts the credit score.
The credit score, even initial, is based on the information on the credit report, and they only appear when we get a credit card or loan. Everybody starts their credit score with different numbers. But it definitely won’t be aero score as the minimal possible rating is 300 according to the commonly accepted FICO scoring model.
On average, first credit score ranges from 500 to 700 depending on your initial performance, according to credit expert John Ulzheimer, who has worked at both FICO and Equifax.
What Your First Credit Score Means
The first credit score means that you have enough credit history to generate a starting credit score. It also carries much additional information such as:
- Your initial behavior as a borrower, any mistakes you make, and how you correct them.
- The types of loans you’re likely to get approved for as well as those which you’d better avoid.
You can check your credit score for free online and learn more about what it means.
What Goes Into Your Starter Credit Score?
When you are just starting to build your credit, you may get not much information at the credit bureaus. You need a longer credit history.
What you can do now at the starting point is making on-time payments, applying for various types of credit and showing that you are capable of managing loans responsibly.
However, don’t take too many loans in too short time – it may show to potential lenders that you’re high risk.
Starting Credit Score – Do it right
58% of Americans don’t know their own credit scores, according to a survey by the American Bankers Association. If you’ve done the first steps and found out your credit score it’s already a good start.
The next step you are to take is creating a good credit. Improving credit score is hard work which will be easier if you follow some simple recommendations:
- Start with a credit card that doesn’t charge an annual fee. This way you’ll be able to keep it open for as long as possible. Choose only those credit types that you are likely to get approved for. This will help to avoid many hard credit checks.
- Use Your Credit Card Regularly and Responsibly. Small charges and regular monthly payments will facilitate the credit-building process.
- Never take out loans that you can’t repay on time: Payment history is one of the most important factors influencing your credit history (35%). Besides, you can control this factor improving the score.
- Take care of your Credit Utilization level. Try to avoid maxing out any of your credit cards.
- Always have some savings in case of emergency.
- Check your credit score. Make sure there’re no mistakes on our credit report.
Credit building is a long and difficult process. It will be much easier if you understand what you start with and where to go.
If you need urgent financing right now, you can always apply for online Payday Loans for no credit, or for bad credit. Make sure you repay them on time, and this experience can be even helpful in starting your credit history.
