Dream of financial freedom, but fear your credit score might be holding you back? You are not alone. From low-interest loans to grabbing that ideal apartment, a good credit score opens a world of opportunities. For individuals fresh to the credit game, however, a burning issue surfaces: exactly where does your credit score start?
This reveals the truth about the source of your credit score and demolishes the lies:
First myth: your credit score begins at zero. Not at all. From 300—the lowest possible score—to a flawless 850, credit score ranges such as FICO® and VantageScore range. You probably won't start so low, though, unless you have made some major credit mistakes—like loan defaulting.
Second myth: Everyone begins with a "Good" score. Hold on there, aficionado for credit scores. You might not have a score at all if you have not yet developed any credit history—that is, if you have not used credit cards, take out loans, etc. Credit bureaus simply have nothing to work with; they cannot calculate your score without information. Without credit activity.
What is the Real Deal then?
Here is the reality regarding the modest beginnings of your credit score:
For individuals fresh to credit, the "No Score" Zone is most likely. You will just not have a credit score without a credit history. There is nothing negative about this! It just means you have a fresh start on which to grow.
The spectrum of the "Starting Score" Once you start using credit responsibly—that is, considering on-time payments, and low credit use—your score will progressively start to rise. Many elements can affect this first score, including:
Sort of credit you apply: A good credit history can be established with secured credit cards or student loans taken out under sensible repayment terms.
Your ratio of credit usage: You're utilizing this proportion of your credit limit. For a good score, keep it less than thirty percent.
Building a decent credit score depends on making payments on time. Late payments seriously lower your score.
Ground Up Building Your Credit Score: Knowing where your score—or lack thereof—may start can help you to create a solid credit history and see your score climb.
Ask a friend or relative with credit to add you as an authorized user on their credit card. This lets you profit from their good credit history, but keep in mind that prudent use is absolutely important!
Choose a Secured Credit Card; these cards call for a security deposit serving as your purchasing limit. Use it wisely and pay on schedule to have a good credit record.
Become a loan borrower. Fellow Signatory: While co-signing a loan for someone with good credit will help you build credit, only do this if you have faith the borrower will pay back on schedule.
Review your credit report often for mistakes and, should one find them, act to fix them. This guarantees that your score fairly captures your creditworthiness.
Remember:
Good credit requires time and careful credit management. Should your score not soar overnight, avoid becoming demoralized. Following these guidelines and making sensible credit use will help you to be on your path to open a universe of financial possibilities!
To get more about your credit score right now, phone (888) 803-7889.