This is a question asked by those who are starting on their credit journey and long-time credit users alike.
What credit score did I start with? How did it end up where it is now? How do I get it higher?
The quest for a good credit rating can sometimes feel like climbing a mountain, but eventually, you will see the view from the peak.
Read on to learn what a standard starting credit score is, and how you can work to boost your credit reputation.
What Does Your Credit Score Start At When You Turn 18?
When you turn 18 you can’t just run out and get a loan at prime lending rate. You will need to establish a history of credit before you are even assigned a beginning score!
Usually, you will need to utilize a line of credit for at least six months before being issued a credit rating.
Even if you pay back your first line of credit with impeccable timing during those six months, your starting score will only be around 500. This is in the fair to poor credit score range. This is because credit bureaus want you to have a longer history of good credit in order to rate you as trustworthy.
A good credit score is around 650, but your score can go as high as 850.
If you started with a score below 500, chances are you made some common credit mistakes. Missing payments puts a big dent in your credit, as does overuse of your credit accounts.
What you don’t want to do is ignore your credit rating and rely on bad credit loans or payday loans to get by. Missing payments on these loans can put you into a massive debt spiral that is next to impossible to escape.
Regardless of where your credit score was or is now, there are ways to get it back up.
How to Rebuild Your Credit
There are some very straightforward ways to kickstart your credit rating.
They require discipline and a bit of patience – no matter what anyone claims, there is no such thing as free credit repair.
But follow these practices and before you know it your credit rating will be healthier.
Apply For No Annual Fee Lines of Credit
Your credit score is influenced by how much available credit you have across all your open accounts. Therefore, having more credit accounts, even if you don’t use them, can help you raise your score.
There is a bit of a downside here. Every time you apply for a line of credit, there will be a “hard inquiry” on your credit report. This causes a temporary dip in your credit score for 12 months and is designed to discourage people from opening too many lines of credit. The penalty of a hard inquiry applies even if you aren’t approved for the account.
So only apply for accounts you are confident you will be approved for, and don’t go overboard. Make sure you check all of the terms and conditions carefully when applying to make sure there is no monthly or annual fee.
Keep Usage Low
Another factor that influences your credit rating is how much credit you use. Even if you do pay your bills on time regularly, consistently spending close to your combined credit across all accounts will cause a dip in your score.
Always raise your max limit on your credit accounts when you can, and ideally keep the total amount of credit you use each month under 30% of your total available credit.
Always Pay on Time
This one goes without saying, but not paying your bills on time is the biggest factor for a low credit score. The good news is, starting to build better habits can raise your score quickly.
Be sure to always pay at least the minimum required amount from each credit account every month. Then make sure you create a household budget and work towards paying off outstanding debts.
Click to learn about the two best methods to get out of debt and why they work.
Monitor Your Credit Report
Another thing to watch out for are errors on your credit report. This happens very frequently and affects people regardless of how strong their credit record is.
A 2012 study by the FTC revealed that 26% of people surveyed had at least one mistake on their credit report. These errors were serious enough to harm their reputation for loans.
You can dispute errors on your credit report on your own, but it can take well over a year and cost you precious time you don’t have.
Quickly Boost Your Credit
If you just realized that an error on your report might be the culprit for a low credit score, you are far from alone. You might also be unfairly hit by hard inquiries that are holding you back.
The good news is, at RepairCreditQuick we can give you a free copy of your credit report, and a free consultation on whether or not we can help fix them. We will outline a plan to fix your credit rating, and if you choose our services you only pay for what you need, for the time you need it.
To get your free credit report and a consultation with one of our financial partners, contact us today.