Credit Help and Tips

What Credit Score Do You Start With?

Credit score Q&A: “What credit score do you start with?”

Questions related to credit scores are always difficult to answer because companies like FICO don’t reveal every detail of their complex scoring algorithms.

Credit scores also happen to be very unique from consumer to consumer, with no two alike.  Kind of like snowflakes.

Minimum Requirement for a Credit Score

  • In order to generate a FICO score
  • You need at least one credit account that is 6+ months old
  • And some reported activity on that account
  • Within the past six months

Anyway, it’s worth noting that you won’t even have a credit score unless you’ve got enough information on your credit report to generate one.

By enough information, I mean at least one credit account that has been open for six months or longer.

And that account must have been reported to the credit bureaus within the past six months. At least that’s what it takes to generate a FICO score.

Without that, you probably won’t even have a credit score. And there are millions of people out there with so-called “thin credit” that don’t have credit scores.

That said, assuming you do have the bare minimum credit history to generate a credit score, your score will be determined by the open and active account(s).

If you only have one account, and it’s in good standing, meaning you’ve made payments regularly and kept the balance low (credit utilization), you should have a fairly good credit score.

After all, without any negative information, there’s no reason you should have a bad credit score.

However, it’s hard to say whether it’ll be above 800 or just above 700 – that will depend on a number of different factors, some that FICO and the other credit score creators don’t really make clear.

The only real clue comes from a FICO study, which revealed that after one year, the median FICO score of a sample of “new-to-credit” consumers was 659, compared to the national median of 713.

So individuals who only had about a year of credit history were scoring a little more than 50 points below more seasoned credit consumers.

[FICO score range.]

Oh, and more than half (50.1%) of these thin credit consumers started their history with a credit card (do you need a credit card to build credit?).

Credit Scores Mean Little Without Credit History

  • While an excellent credit score is great on the surface
  • If you don’t have much history behind it
  • Lenders may not extend you new credit
  • Because a lack of negative history isn’t good enough to judge you by

Regardless of your three-digit number, without much credit history, a credit score means very little.

In other words, that number (aka YOU) needs to prove itself before credit card issuers and lenders give you any, ahem, credit.

Think of it this way. If someone you knew wanted to borrow $1,000, and had proven in the past that they paid one other person back after borrowing a paltry $20, would you trust them?  Sure, they never slipped up, but they didn’t prove a whole lot either. Creditors look at things in a similar fashion.

For example, mortgage lenders typically require three open credit lines with two years of history on each.

Without that requirement met, even your excellent credit score may be deemed useless.

In conclusion, don’t concern yourself with the credit score you start with – focus on it long term, and make sure you take the right measures to keep it high, like making on-time payments, keeping balances low, and applying for credit sparingly.

Tip: How to raise your credit score.

By Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.

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