Monday, June 5, 2023

What Is Your Credit Score When You Turn 18

Get Your First Credit Card

What Does Your Credit Score Start At?

If possible, acquiring your own credit card will help you build your credit while practicing responsible credit card use. However, at 18, you probably wont qualify for the majority of credit cards available to you. To avoid having too many recent hard inquiries, be strategic about the cards that you apply to:

Secured Credit Card: Unlike most credit cards, secured credit cards require a deposit that will act as your line of credit. They must be paid off in full each month, but over time with responsible use, youll be able to apply for a traditional unsecured credit card.

Student Credit Card: Credit card companies understand that just because youre young, doesnt mean you wouldnt use credit wisely. If youre enrolled in school, you may be able to apply for a student credit card. These cards usually come with higher interest rates and penalties, so make sure you shop around before committing to one.

How Can I Help My Teenager Build Credit

If youre wondering how teenagers can build good credit, there are a few great ways. Perhaps the easiest is adding them as an authorized user on your credit card depending on your issuers policies, the account could be reported to the credit bureaus and work to establish your childs credit history each and every month.

With new tools such as the UltraFICO, your 18- and 19-year-old teenager is even able to build their credit with accounts that arent traditionally reported to the credit bureaus. This means that if they pay their own auto insurance bill each month or have a cell phone bill thats their own responsibility, the payment history can be reported to their credit.

Of course, part of helping your teenager build their credit over time is teaching them the importance of each move along the way. Explain why future creditors will care about their payment history and debt ratios, and how a low score can result in higher interest rates or application denials.

Walk your child through their first credit card or student loan application, and help them create a plan for managing any debt. Keep the lines of communication open, and you can hopefully help them avoid many of the poor financial decisions that young adults often make.

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How Do Credit Score And Credit Limit Relate

Lenders view your credit score as a measure to gauge the risk you pose as a borrower. If a lender looks at you as someone with minimal risk, it might be willing to offer you a higher credit limit than it would have if you had less-than-perfect credit. You might qualify for a higher credit limit than someone with the same income if you have a better and longer credit history that results in a higher credit score.

Your , on the other hand, may have an effect on your credit score through your credit utilization ratio. This refers to the amount youve borrowed from your total available credit and should ideally be 30% or lower. If you have a total available credit limit of $10,000 through different credit products and have borrowed $5,000 so far, your current credit utilization ratio stands at 50%, which is significantly higher than the desired limit.

How To Build Your Credit At 18

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If youre 18 and trying to build your credit, good for you. This is an important first step toward a secure financial future. Fortunately, there are some simple tips that you can use to make sure that you get off on the right track.

The average credit score for 18-year-olds is 631. Lets take a closer look at how this number compares to various generations below.

Comparing Credit Score by Generation

Age Group

So, what are some steps you can take to help build your credit quickly? Here are a few tried and true tips you may want to try.

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When Does Your Credit Score Start

Banks Editorial Team

Banks Editorial Team

You may have wondered in the past: when does your credit score start? The subject is often unclear does it start as soon as you obtain a line of credit, or before? Does everyone start with the same score, or is every score unique from the get-go? Maybe you thought that everybody starts at 300 the lowest possible score or maybe everybody starts with a perfect 850, the highest possible score. In fact, neither is the case. It is important to realize that your credit score starts only after you obtain credit, and, from the start, is tethered to your reliability in paying back debts.

Ask Someone To Be Your Cosigner

Another way to get a credit card at the age of 18 is to apply for one with a cosigner. A cosigner is someone with good credit who legally takes on responsibility for the card as well. If you stop making payments, the lender can go to the cosigner for payment.

Having a cosigner can give you plenty of additional card options, especially if youre under 21. Youd typically only be considered for credit cards with low minimums, high interest rates and few to no card benefits at such a young age. A cosigner can help you qualify for better cards with higher limits, more perks and a better interest rate.

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What Is The Usual Starting Credit Score

While VantageScore and FICO scores start at 300, its unlikely that youll start with such a low score. Credit scores at the bottom end of the scale demonstrate serious lapses in how one uses credit, and getting to this stage at the beginning of ones credit history is highly improbable. Instead, depending on how well you manage your credit, your first credit score might be around the 500 mark.

The age of your oldest form of credit plays a role in your credit score. However, working on other aspects can even get your initial credit score to be around 700. For instance, while making timely payments toward your first credit card helps to improve your credit score, factors such as the amounts you owe, the mix of credit you have and your applications for new credit also play a role.

How Can An 18


An 18 year old can build credit by opening either a secured or unsecured credit card, using that card responsibly, and paying off the money he or she has borrowed in time. We recommend you pay in full, but the most important part is to at least make the minimum payment on time, so that your account shows up as in good standing on your credit report.

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Can You Have A Credit Score Of Zero

No you cannot have a zero credit score because the industry-standard range begins at 300 and reaches up to 850 for people who meet the minimum standard for a numerical rating.For example, suppose a lender looks at a persons consumer report with insufficient historical information. In that case, they might see a message stating No Record Found or Too New to Rate instead of zero.In another instance, a lender reviewing an applicant that recently filed bankruptcy might see a 300 result rather than zero.

As You Begin Building Credit For The First Time It Can Help To Understand What Influences Your Starting Credit Score

When you check your credit score for the first time, you might be surprised to find a three-digit number, even if youâve never used credit before. Thatâs because your credit score doesnât start at zero. In fact, the lowest possible score from FICOî or VantageScoreî is 300.

But unless youâve had some recent trouble with on-time payments or high spending, your score likely wonât be that low. Read on to learn more about where your score starts and why using credit responsibly is important from day one.

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Stay On Top Of Your Credit

To build and strengthen your credit score, monitor it regularly. You can check your credit score for free with Experian and many other services, including tracking programs that your bank or credit card issuer might offer.

Watching your score’s progress could motivate you to keep it moving higher. Plus, you can take notice right away if, say, it drops due to an accidental missed payment. Watching your score change over time is one of the best ways to build your understanding of credit.

How Long Does It Take To Get A 700 Credit Score

Private Student Loans for Bad Credit

While getting an excellent credit score cannot happen overnight, it is possible to get a good credit score of around 700 in less than a year, provided you follow the right steps. These include:

Pay all your bills on time and never miss a payment.

Reduce your outstanding balances to bring down your credit utilization ratio .

Don’t apply for or open new credit accounts frequently.

Don’t apply for different types of credit just to improve your credit score unless youre sure of making timely payments and keeping your outstanding balances low.

Go through your credit reports every six months and dispute inaccurate information.

Keep your oldest credit card account active as it increases the length of your credit history.

If you’re looking for your first credit card with the aim of building credit, consider getting one with no annual fees. Weve reviewed over 1,600 consumer credit cards so that you can select one that suits your requirements easily.

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Discover It Student Cash Back

Sign-up bonus: None, but Discover will match all cash back earned for the first year

Rewards rates: Earn 5% cash back on everyday purchases in select rotating categories up to $1,500 when you activate. Earn unlimited 1% cash back on everything else.

The Discover it Student Cash Back card is targeted to students. That means depending on your income situation, you may be able to apply for it without a co-signer. Enroll every quarter to earn 5% cash back on up to $1,500 in purchases made in various categories throughout the year, and Discover will match all cash back earned for the first year of having the card. Plus 1% cash back on all other purchases.

Unique perk: You also earn a $20 statement credit for each school year that your GPA is at least 3.0, up to the next five years.

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How To Build And Maintain A Good Credit Score

Once you have a credit score, how can you help maintain or improve it? First, you need to understand what is considered a good credit score. Both the FICO® Score and VantageScore models range from 300 to 850. Using the FICO scoring model, a score 670 or higher is considered good and a score of 800 or above is considered exceptional. A VantageScore 661 or above is considered good while a score 781 or above is considered excellent.

The higher your credit score, the more likely you are to be approved for loans or credit at the best rates and most favorable terms. The lower your credit score, the more difficult it will be to get a credit card, obtain favorable terms on a loan or even rent an apartment.

Whether you want to improve your credit score from good to excellent or you’re trying to raise your poor credit score to the fair range, there are plenty of things you can do right away to build credit history and improve your credit score.

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Best For Low Fees: Petal 2 Visa Credit Card

Heres why: Its hard to get more low-cost than the Petal® 2 Visa® Credit Card. It charges no fees.

That means the Petal® 2 Visa® Credit Card doesnt charge an annual fee, a late payment fee or foreign transaction fees. Thats great, especially for a credit card that doesnt require a credit history or a security deposit.

The Petal® 2 Visa® Credit Card does offer rewards. Cardholders begin by receiving 1% cash back on all purchases, but can earn up to 1.5% cash back after making on-time payments.

The Petal® 2 Visa® Credit Card also comes with a money-management tool to help your teen track their spending.

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Can You Have A Credit Score Without A Credit Card

How to Dramatically Increase Your Credit Score in 2022

Is it possible to build credit without a credit card? Yesbut you still need to have at least one line of credit associated with your name. If you take out a student loan or a car loan, for example, those credit accounts become part of your credit history and help establish your starting credit score. You could also build credit by becoming an authorized user on a friend or relatives credit card, or use a service like Experian Boost to add telecommunications and utility payments to your Experian credit report.

If you dont have a credit card, where does your credit score start? It all depends on how you use the other credit accounts under your name. If you make on-time payments on your student loan, for example, youre doing the work of building a positive credit history. If your payments are consistently late, your credit historyand credit scoremight not be as good.

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Building Your Credit Score At 18

Turning 18 is one of those major rites of passage in life. Youre finally an adult, you can vote and you can get your first credit card. Sounds great, right? The problem is that in order to get credit, you usually have to have credit so where do you begin?

Why should you know how to build your credit?

At the most basic level, your credit scores tell potential lenders how trustworthy you are, based on your history with spending. More than that, your credit score will play a large role in just about every large purchase throughout your adult life everything from buying a car or a house to applying for a job can be impacted by your credit score. As such, its crucial that you know how to build and maintain a good, solid credit history.

Americans without a Credit Score & Those Working to Build Credit


However, as you can see above, the vast majority of 18-year-olds are credit-invisible, meaning that they have no credit history established with any of the 3 major credit bureaus . This can present a major problem when trying to finance any large, expensive item or even rent an apartment.

How Your Credit Score Is Calculated

To understand why your first credit score is likely to be somewhere in the middle range, it’s important to know how credit scores work. Your credit score is calculated using five factors:

  • Payment history: The most important single factor in your credit score is whether or not you pay your bills on time. Payment history accounts for 35% of your FICO® Score, which is why it’s so important never to miss a payment.
  • : Credit utilization refers to how much of your available revolving credit you’re using. Your is calculated by dividing the amount of revolving credit you’re currently using by the total of all your revolving credit limits. Aim to keep your credit utilization ratio under 30%, both overall and on each credit account, which you can do by keeping balances low or at zero. Credit utilization accounts for 30% of your FICO® Score.
  • Length of credit history: How long you’ve used credit accounts for 15% of your credit score. This takes into consideration the age of each account on your credit report as well as the average age of all your open accounts. The longer your credit history, the more information credit bureaus have about you, which generally translates into higher credit scores.
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    Use Loans To Build Credit

    If you have outstanding student loans, one of the easiest ways to build credit is simply to make all your loan payments on time. If you don’t have student loans, getting a car loan or a personal loan and repaying it on time is another way to demonstrate you can use credit responsibly. If you have trouble getting good loan terms on your own, asking someone to cosign on the loan with you can help.

    Another option: Some smaller banks and credit unions offer designed to help you establish credit. As with a secured credit card, these loans require you to make a deposit, which you then pay off over six to 24 months. Those payments are reported to the credit bureaus, and you get your deposit back once the loan is paid.

    Whatever type of loan or credit you obtain, remember the factors used to calculate your credit score. Be sure to make your payments on time, keep your credit utilization ratio below 30%, and avoid generating too many hard inquiries on your credit report.

    You may even be able to build credit and improve your credit score simply by paying bills related to daily living. For example, Experian Boost is a free service that adds your positive cellphone and utility bill payments to your credit file, often instantly improving your FICO® Score.

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