Your Initial Credit Score: Starting Right at Age Eighteen

Your first credit score could be between 350 and 700, depending on how you manage your first borrowing relationships.

Credit scores need data to make predictions about future behavior. However, we all start with a clean slate – no credit history. Turning 18 does not create a record.

When you borrow money, and the lender reports this to the credit bureaus, it creates a record. Six months of payment history provides enough data for a reliable credit score prediction.

Therefore, your behavior after opening your first account determines your initial score. Start on the right foot by making all payments on time!

Credit Score At Age Eighteen

Young adults do not automatically get a credit score when they turn eighteen. Therefore, we cannot predict your initial credit score yet.  

However, as a legal adult, you can now borrow money and start building a history of timely payments.

No History

Young adults do not have credit scores on their 18th birthday because they have no credit history. Credit scores forecast future payment habits using past credit activity.

The minimum requirement for your first score has three elements.

  1. At least one credit account open for six months
  2. At least one account updated in the last six months
  3. The credit file must not list the person as deceased

First Account

Eighteen-year-olds get an initial credit score six months after opening their first account. This concept leads to an important question: How can first-time borrowers get approval from a lender?

At 18, verifying your identity is vital to securing a first-time loan. My research at Experian revealed that young adults with verified identities often pose less risk. Our risk rankings always listed these categories, from highest to lowest:

  1. Having no credit record is the highest risk.
  2. A credit score below 580 performs poorly.
  3. Having a verified identity indicates moderate risk.
  4. Credit scores above 640 pose fewer risks.

You can verify your identity by applying for a federal student loan, opening a checking account, securing a credit builder loan, or obtaining a secured credit card.

Credit Score After Six Months

Eighteen-year-olds will get their initial credit score after six months of making payments on their first account. The scoring equation now has enough information to make a reliable prediction.

The initial score depends on borrowing behaviors as measured by five metrics of varying weights.

  1. Payment record: 35%
  2. Amounts owed: 30%
  3. Length of history 15%
  4. Account mix: 10%
  5. New credit activity: 10%

On-Time Payments

A starting credit score after six months of on-time payments will likely fall into the fair range of 580 to 669. Your actions regarding the abovementioned four factors can raise or lower your first score.

  1. Amounts owed affect your starting credit score: high balances lower it, low balances raise it. A student loan increases your debt, which can decrease your score. In contrast, starting work without attending college can result in a higher score due to lower debt.
  2. Length of history: all starting scores have the same six-month duration.
  3.  Account mix: For most initial scores, typically, just one account type is considered, as it’s often hard to borrow with no credit history.
  4. New activity: hard inquiries and opening new accounts can lower your score. A young adult who frequently applies for credit may decrease their score, while someone with a single account could have a higher score due to less new activity.

Late Payments

After six months of history, a starting credit score, including late payments, will likely fall into the poor range of 350 to 579. Although amounts owed, credit history length, account mix, and new credit activity play a role, late payments can damage your credit score more.

The severity and timing of late payments determine the extent of the drop in your initial credit score compared to that of other young adults.

  • The most severe delinquencies hurt opening scores more. For instance, 90 days late is worse than being 60 days late.
  • The most recent delinquencies hurt starting ratings more. For example, 60 days late today is worse than 60 days late two months ago.

A late payment remains on your consumer report for seven years after the first delinquency date, making it difficult to recover. Get off on the right foot and pay all your bills on time!