What Age Do You Get a Credit Score?

A credit score is a numerical representation of an individual’s creditworthiness, typically a three-digit number ranging from 300 to 850. This score helps lenders assess the likelihood of a person repaying borrowed money on time. It serves as a quick indicator for financial institutions when evaluating applications for loans, mortgages, or credit cards. A favorable credit score can lead to better interest rates and more advantageous terms on various financial products.

Minimum Age Requirements for Credit

There is no specific age at which a credit score is automatically assigned to an individual. Instead, a credit score is generated once a person begins engaging in credit activities that are reported to credit bureaus. The ability to independently build a credit history is tied to the legal age for entering into contracts. In the United States, individuals must generally be at least 18 years old to open their own credit card account or enter into other credit agreements.

While federal law permits credit card applications at 18, applicants between 18 and 20 typically need to demonstrate independent income sufficient to make payments. Without sufficient verifiable income, obtaining an unsecured credit card before age 21 can be challenging.

How to Establish Credit History

Establishing a credit history from scratch involves specific steps that create the financial data points necessary for a credit score to be calculated. One common method is becoming an authorized user on an existing credit card account. This allows an individual to use the primary cardholder’s account, and if the primary user manages the account responsibly, the authorized user can benefit from that positive payment history being reported to credit bureaus. However, the primary cardholder remains solely responsible for payments, and not all issuers report authorized user activity to all bureaus.

Another effective way to begin is by applying for a secured credit card. With a secured card, a cash deposit, often ranging from $200 to $500 or more, serves as collateral for the credit limit. This deposit minimizes the risk for the lender, making it easier for individuals with no credit history to qualify. Responsible use, including on-time payments and keeping balances low, is then reported to credit bureaus, building a positive history.

Credit-builder loans offer a different approach, where the loan amount is typically held in a savings account while the borrower makes regular payments. Once the loan is paid off, the funds are released to the borrower, and the payment history is reported, demonstrating financial discipline. Additionally, some services allow for rent or utility payments to be reported to credit bureaus, which can contribute to establishing a credit history.

Components of a Credit Score

Once a credit history has been established, credit scoring models like FICO and VantageScore use various factors to calculate an individual’s credit score. These components include:

Payment history: This is typically the most significant factor, accounting for approximately 35% of a FICO score. It assesses whether payments on credit accounts have been made on time, as late or missed payments negatively impact the score.
Amount owed (credit utilization): Making up about 30% of a FICO score, this refers to the percentage of available credit currently being used. Keeping balances low relative to credit limits, ideally below 30%, is generally advisable.
Length of credit history: Accounting for around 15% of the score, this considers how long accounts have been open, including the age of the oldest and newest accounts. A longer history of responsible credit management is generally viewed favorably.
New credit: This makes up about 10% of the score and reflects recent credit applications and newly opened accounts. Applying for too much new credit in a short period can be seen as risky and may temporarily lower a score.
Credit mix: Also about 10% of the score, this evaluates the diversity of credit accounts, such as credit cards, installment loans, and mortgages. A healthy mix can demonstrate an ability to manage different forms of credit responsibly.

Monitoring Your Credit Score

Regularly monitoring your credit score and credit report is important for maintaining financial health. Individuals are entitled to a free copy of their credit report from each of the three major nationwide credit bureaus—Equifax, Experian, and TransUnion—once every 12 months, accessible through AnnualCreditReport.com. These reports provide detailed information about credit accounts, payment history, and inquiries, but they do not typically include a credit score.

Credit scores can be obtained for free through various sources, including many banks and credit card issuers that offer free score access to their customers. Additionally, several free credit monitoring services provide regular updates on credit scores, often using VantageScore models, which are distinct from FICO scores but also range from 300 to 850. Checking credit reports for accuracy and identifying any signs of fraudulent activity is a practical step, as errors can negatively impact a score.