Contrary to what most people believe, your credit score doesn't start at a specific number.
Instead, your credit score actually just doesn't exist if you've never been extended credit before.
When you turn 18, you're eligible to apply for and receive credit. Then, when you open an account, that credit account starts reporting on your credit report and gives you a score. For most people, they can expect to start out with a 650-750 credit score.
From there, the type of credit you use and how well you use credit will determine where your score ultimately goes. In the beginning, your score might fluctuate a lot since there isn't a solid track record of how well you use credit.
After a period of time, though, your score will start to mature and reflect an accurate picture of your credit usage.
The key to keep in mind is that your credit score is not an indicator of how well you use money. Your credit score is only an indicator of how well you use credit.
So, as you're building up your credit from scratch, keep in mind "am I using debt well by making this decision?".
Using debt well means you have a clear plan to use debt for a short period of time and you will pay the money back in X amount of months.
Careless debt usage will surely bring your score lower and lower.
A great way to start building credit on your credit report is through a secured credit card. A secured credit card is a safe and effective way to show that you can use credit well. Once you have the secured card, make small purchases on it that you can pay off every single month.
Hey, my name is Kyle and I'm a Mortgage Advisor serving Tennessee, Florida, and Ohio. My goal is to help you get a crystal-clear home loan that helps you win the house you love. If you're ready to create your home-buying plan, you can reach me through any of the ways below:
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NMLS# 1701021
Motto Mortgage Alliance
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8900 N. Dixie Dr.
Dayton, OH 45414
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