What Is a Normal Starting Credit Score?

A credit score serves as a numerical summary of an individual’s creditworthiness. It is a three-digit number that helps lenders assess the likelihood of repayment and determine credit terms, such as interest rates. This score impacts various financial aspects, including obtaining loans, securing housing, and determining insurance premiums.

Establishing Your First Credit Score

A credit score is generated once sufficient credit activity is reported to credit bureaus. It typically takes a minimum of six months of reported credit activity for a FICO score to be established. Some scoring models, like VantageScore, may generate a score sooner, even after the first activity is reported.

One common method to establish initial credit history is obtaining a secured credit card. An upfront cash deposit is required, which typically becomes the credit limit. This deposit acts as collateral, reducing issuer risk and making these cards accessible to those with limited or no credit history.

Another approach is a credit-builder loan, where a lender holds the loan amount in a savings account while the borrower makes regular payments. Once the loan is fully repaid, the borrower receives the money, and the on-time payments are reported to credit bureaus, demonstrating responsible financial behavior. Becoming an authorized user on an established credit card account also helps build credit, as the authorized user benefits from the primary cardholder’s positive payment history, if reported to credit bureaus.

Understanding Initial Credit Score Ranges

There is no single “normal” starting credit score; it depends on reported credit activity and the specific scoring model used. Credit scores, such as FICO and VantageScore, generally range from 300 to 850. For new credit users, initial scores often fall within the “fair” or “good” categories.

A fair FICO score typically ranges from 580 to 669, while a good FICO score is between 670 and 739. VantageScore ranges are slightly different, with near prime or fair scores falling between 601 and 660, and prime or good scores between 661 and 780. These initial ranges signify to lenders that an individual has a limited credit history, but responsible management, including on-time payments, can positively influence the score. It is common for initial scores to be lower than those of established credit users due to the short length of credit history.

Building a Positive Credit History

Establishing a positive credit history relies on consistent financial habits. Making on-time payments is the most important factor influencing a credit score, and a primary factor in scoring models. Consistently paying at least the minimum amount due by the due date helps demonstrate reliability to lenders.

Keeping credit utilization low is another important habit. Credit utilization refers to the amount of revolving credit currently being used compared to the total available credit, expressed as a percentage. It is recommended to keep credit utilization below 30% of the available credit limit, as lower percentages indicate responsible credit management and positively impact scores.

The length of credit history also contributes to a credit score; older accounts in good standing positively affect it, so avoiding unnecessary account closures is beneficial. Over time, having a mix of different credit types, such as credit cards and installment loans, is also advantageous. Acquire these gradually to avoid taking on too much debt too quickly.