14 Jun How Much Credit Score Do You Start with?

When you check your credit score for the first time, say, after having just turned 18, you might be surprised to find that you don’t have a credit score or a low score. The lowest credit score from FICO and VantageScore is 300. However, your score shouldn’t be too low unless you’ve issues like unauthorised overdraft or late payments.

You are not just automatically assigned a credit score when you turn 18. You usually start with no score, unless you fell into unauthorised overdraft or made late payments as a minor. Read on to discover what influences your score and how to build credit as a young adult.

What influences a credit score?

There are two types of scoring systems: FICO and VantageScore. The major bureaus use VantageScore, as they worked together to create this system in 2006. Usually, one score doesn’t differ too much from the other, as they value payment history and utilisation ratio.

How to build your credit from nothing

Remember that if your credit file is thin (you have little to no history), your score will be incredibly volatile. As it’s so susceptible to fluctuation, it’s important to be strategic and pedantic about credit usage.

The only real change to your score will be from your reported balance and utilisation rate monthly. For instance, an ideal utilisation rate of below 10% swinging to 90% can damage your score by as much as 100 points.

Start by getting a secured credit card. This is a card where you’ll put down a downpayment, which will act as your limit. Be sure to pay on time and not use too much credit to optimise your utilisation ratio. On-time payments make up around 35% of your score, too.

You can check your score within a few minutes using CreditBoost’s free online credit checker. If you need help fixing your credit score, be sure to contact us today. We’re glad to be of service.