4. Is bad credit worse than no credit?

Having bad credit is worse than having no credit. No credit is a blank slate that you can build from. Bad credit, however, shows negative behaviors like missed payments or high debt. Improving bad credit is possible; it just requires more time and effort.

What Credit Score Do You Start With? A Beginner's Guide

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Key takeaways

You don’t start with a credit score; one appears after three to six months of reported credit activity.
No credit is different from less than ideal credit. It simply means you haven’t established a borrowing history.
Responsible habits, such as timely payments and low balances, can help your first score start strong and improve quickly.

If you’re beginning to use credit, you might wonder what credit score you start with. Do you start with zero or a default number? The truth is that you don’t start with any score, but with no credit.

Starting with no credit means that your first score depends on the credit habits you practice over the first few months. No credit is different from starting at the bottom; it allows you to achieve a good score faster.

Read on to learn when you’ll receive your first credit score and how to build a good one from day one.

What credit score do you start with?

Everyone has a unique starting credit score, depending on how you use your first credit card or loan. Rather than starting consumers at 300, the lowest possible score, the credit bureaus give you a blank slate. They consider you unscorable or credit invisible until you’ve generated enough data to receive a score.

Having no credit is different from having less than ideal credit. It simply means that the bureaus do not yet know how you handle borrowing and repaying money. Once they do, they will assign you a score, and it may not fall in the poor range.

When do you get a starting credit score?

You will get your first credit score after you open a credit card or take out a loan. The financial institution will report activity to the major credit bureaus – Experian, Equifax, and TransUnion. They will add this information to your credit report. The activity financial institutions report includes payments, balances, credit used, and account status.

Once that information is available, scoring models such as FICO or VantageScore can generate your first score. FICO typically requires six months of data, whereas VantageScore can usually rank you within three months.

If you consistently pay on time and keep balances low, your score may start higher and improve quickly as you build more history.

What is a good beginning credit score?

There isn’t a single default number everyone starts with, but most people’s first score falls somewhere in the fair to good range. For FICO, that means between 580 to 670, while VantageScore considers 661 to 780 as good.

Where you land depends on how you manage your first credit account. Pay bills on time, keep balances low, and avoid missed payments to receive a higher number.

Your initial score will not be perfect since scoring models prefer longer credit histories. Experian found that the Silent Generation has an average credit score of 760, while Gen Z ranks at 681, still in the good range. As you practice good habits, you will improve your credit score.

How is your credit score calculated?

The credit scoring models calculate your score using the data in your credit reports. FICO and VantageScore use similar factors, but their formula differs slightly. The goal remains the same: to provide lenders with a snapshot of your financial reliability.

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FICO, used by 90% of lenders, considers these five factors:

Payment history (35%): Paying on time every month is the most important thing you can do to achieve good credit. Payments that are 30 days or more past due can drop your score by 100 points.

Credit utilization (30%): Your credit utilization ratio is the amount you’ve spent versus your credit limit. The ideal utilization range is 1% to 30%. Spending over 30% of your credit limit suggests that you may be overly reliant on borrowing and may struggle to afford your bills.

Length of credit history (15%): This is the amount of time you have had credit accounts. All you can do here is have patience, keep your accounts open, and in good standing.

Credit mix (10%): Lenders prefer a mix of revolving credit (credit cards) and installment credit (loans). Having multiple types of credit shows that you can handle different payments responsibly.

New inquiries (10%): Each time you apply for credit, the financial institution conducts a hard inquiry. Hard inquiries drop your score by five to ten points, temporarily. One instance isn’t a significant concern, but multiple inquiries in a short period suggest you’re desperate to borrow money.

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FICO credit score ranges

FICO scores range from 300 to 850 and are divided into the following categories:

800–850: Exceptional
740–799: Very Good
670–739: Good
580–669: Fair
300–579: Poor

Lenders often rely on FICO when making decisions about loan approvals and interest rates. Being in the good range, over 670, increases your approval odds.

VantageScore ranges

VantageScore is used primarily by credit monitoring sites and apps. Its scores also range from 300 to 850, but its categories are slightly different:

781–850: Excellent
661–780: Good
601–660: Fair
500–600: Poor
300–499: Very Poor

While both models measure similar behaviors, lenders may use one or the other – or sometimes both – to assess your creditworthiness.

How to establish good credit

Building credit takes time, but there are things you can do to speed up the process.

Use your credit card responsibly: Credit cards are an easy way to build credit as long as you pay bills on time and don’t overspend. Consider applying for a secured credit card. Secured cards are easier to qualify for and can help you establish a credit history.

Become an authorized user: If a friend or family member has good credit, ask them to add you as an authorized user on their account. The bureau will include their activity in your credit report, boosting your score. You don’t even have to use the card to benefit.

Take out a credit builder loan: Credit builder loans are unique since the lender holds onto the money while you make payments over a fixed amount of time. They report your payments to the bureaus, helping you establish a positive payment history. Once you’ve paid off the loan, you receive the money.

Report rent or utilities: Rent reporting services will report your rent payments, utilities, subscriptions, and other monthly bills to the credit bureaus. The bureaus will add this information to your credit reports. Adding a history of on-time payments can help boost your score and provide lenders with more positive data to consider.

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Can you get a credit score without a credit card?

Credit cards are the easiest way to build credit, but they aren’t the only option. If you prefer not to use one, you can take out a loan or a line of credit.

Student loans, auto loans, and personal loans all report payments to the credit bureaus and can help you generate a credit score. As can a credit-builder loan.

Even utility bills, rent, or phone payments can contribute to your credit history if they’re reported to the credit bureaus. You will have to enroll in a reporting service for this to work.

The key is consistent, on-time payments and responsible account management. When you do not have a credit card, your payment history is especially important since you do not have a mix of credit or a utilization ratio.

Frequently asked questions

1. How long does it take to build a good credit score?

How long it takes to achieve a good credit score, over 670, depends on your financial habits. If you consistently pay bills on time and keep balances low, you may start with a good score. Generally, it will take up to a year or more of consistent responsible habits to achieve good credit.

2. What is your starting credit score?

Everyone starts with no credit until the bureaus have enough data to generate a score. You will receive your starting credit score after you’ve had a loan or card for three to six months. At that point, the scoring models will have enough data to calculate a number. It may fall anywhere between 300 and 850, depending on your activity.

3. What is the default credit score?

No universal “default” credit score exists. Your initial credit score depends on how you handle your first credit account, not on a preset starting point.

4. Is less than ideal credit worse than no credit?

Having less than ideal credit is worse than having no credit. No credit is a blank slate that you can build from. Less than ideal credit, however, shows negative behaviors like missed payments or high debt. Improving less than ideal credit is possible; it just requires more time and effort.

5. How long does it take to get a credit score?

It takes three to six months to receive a credit score. FICO requires you to have an account open for at least six months. The account must report to at least one of the major credit bureaus for them to assign you a score.

Bottom line

Credit bureaus don’t start everyone at zero; instead, they give you a chance to enter the fair or good range right from the start. All you have to do is practice responsible financial habits. Make all your payments on time and keep your spending below 10% of your limit. Gradually, you will build a solid credit history.

A good credit score will open financial doors for you. You will have a better chance of being approved for rewards credit cards or loans with favorable terms. It can even impact what jobs you qualify for or if a landlord will rent to you. Developing good credit habits from the start is in your best interest.

1. Paycheck Advance is For eligible customers only. Your actual available Paycheck Advance amount will be displayed to you in the mobile app and may change from time to time. Conditions and eligibility may vary and are subject to change at any time, at the sole discretion of Finco Advance LLC, which offers this optional feature. Finco Advance LLC is a financial technology company, not a bank. Expedited disbursement of your Paycheck Advance is an optional feature that is subject to an Instant Access Fee and may not be available to all users. Expedited disbursements may take up to an hour. For more information, please refer to Paycheck Advance Terms and Conditions.

2. Paycheck Advance is an earned wage access service and is not a loan or credit product.

3. Current is a financial technology company, not an FDIC-insured bank. FDIC insurance up to $250,000 only covers the failure of an FDIC-insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply. Banking services provided by Choice Financial Group, Member FDIC, and/or Cross River Bank, Member FDIC. The Current Visa® Debit Card, which may be issued by Choice Financial Group and/or Cross River Bank, and the Current Visa® secured charge card, which is issued by Cross River Bank, are all issued pursuant to licenses from Visa U.S.A. Inc. and may be used everywhere Visa debit or credit cards are accepted. A Current debit account is required to apply for the Current Visa® secured charge card. Independent approval required.

4. Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to timing of payer’s submission of deposits.

5. Debit card: Fees may apply, including out of network cash withdrawal fees, third-party fees, cash load fees, inactivity fees, account closure fees, international transaction fees, replacement card fees, express mail fees and escheatment fees. Build Card: Some fees may apply, including out of network ATM fees of $2.50 per transaction, late payment fees of 3% of any total due balance outstanding and past due for two or more billing cycles, foreign transaction fees of 3% of the full transaction amount (minimum $0.50), card replacement fees per card of $5 for regular delivery and $30 for expedited delivery, cash deposit fees of $3.50 per deposit, and third party processing fees.

6. The Current Visa® Debit Card is issued by Choice Financial Group pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Current Visa® secured charge card is issued by Cross River Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank. Current Individual Account required to apply for the Current Visa® secured charge card. Independent approval required.

7. Individual results may vary. Using your credit card responsibly may allow you to improve your credit score. Credit building depends on various factors, including your payment history, credit utilization, length of credit history, and other financial activities.

8. Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to timing of payer’s submission of deposits.

9. Funds held in Savings Pods are FDIC-insured on a pass-through basis up to $250,000 at our partner bank Choice Financial Group, member FDIC.

10. Actual overdraft amount may vary and is subject to change at any time, at Current’s sole discretion. In order to qualify and enroll in the Fee-Free Overdraft feature, you must receive $500 or more in Eligible Direct Deposits into your Current Account over the preceding 35-day period and fulfill other requirements subject to Current’s discretion. Negative balances must be repaid within 60 days of the first Eligible Transaction that caused the negative balance. For more information, please refer to Fee-free Overdraft Terms and Conditions. Individual Current Accounts only.

11. For eligible customers only. You may earn Points in connection with your Build Card purchases at retailers whose merchant code is classified as: Dining (e.g., restaurants) and Groceries (e.g., supermarkets) and by completing other actions that Current designates as subject to the Current Points Program. The amount of Points granted for different actions as well as the purchase requirements necessary to earn Points will vary, and is subject to Current’s sole discretion. After qualifying, please allow 3-5 business days for points to post to your Current account. Points will expire 365 days after they settle. For more information (including specific eligibility criteria), please refer to the Current Points Terms and Condition.

12. Some fees may apply, including out of network ATM fees of $2.50 per transaction, late payment fees of 3% of any total due balance outstanding and past due for two or more billing cycles, foreign transaction fees of 3% of the full transaction amount (minimum $0.50), card replacement fees per card of $5 for regular delivery and $30 for expedited delivery, cash deposit fees of $3.50 per deposit, and third party processing fees.

13. Boost Bonuses are credited to your Savings Pods within 48 hours of enabling the Boost feature and on a daily basis thereafter, provided that the Savings Pod has accrued a Boost Bonus of at least $0.01. No minimum balance required. The Boost rate on Savings Pods is variable and may change at any time. The disclosed rate is effective as of August 1, 2023. Must have $0.01 in Savings Pods to earn a Boost rate of either 0.25% or 4.00% annually on the portion of balances up to $2000 per Savings Pod, up to $6000 total. The remaining balance earns 0.00%. To earn a Boost rate of 4.00%, the sum of your Eligible Payroll Deposits over a rolling 35-day period must be $500 or more, with at least one Eligible Payroll Deposit equalling a minimum of $200. For more information, please refer to Current Boost Terms and Conditions.

14. Your money is FDIC-insured on a pass-through basis up to $250,000 at each of our partner banks, Choice Financial Group and Cross River Bank, members FDIC.

15. Average value based on Fine Hotels + Resorts bookings in 2023 for stays of two nights. Benefits include daily breakfast for two, room upgrade upon arrival when available, $100 amenity, guaranteed 4PM late checkout, and noon check-in when available. Certain room categories not eligible for upgrade. $100 amenity varies by property. Actual value will vary based on property, room rate, upgrade availability, and use of benefits.

16. Up to $500 per Covered Trip that is delayed for more than 6 hours; and 2 claims per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

17. The maximum benefit amount for Trip Cancellation and Interruption Insurance is $10,000 per Covered Trip and $20,000 per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

18. Baggage Insurance Plan coverage can be in effect for Covered Persons for eligible lost, damaged, or stolen Baggage during their travel on a Common Carrier Vehicle (e.g. plane, train, ship, or bus) when the Entire Fare for a ticket for the trip (one- way or round-trip) is charged to an Eligible Card. Coverage can be provided for up to $2,000 for checked Baggage and up to a combined maximum of $3,000 for checked and carry-on baggage, in excess of coverage provided by the Common Carrier. The coverage is also subject to a $3,000 aggregate limit per Covered Trip. For New York State residents, there is a $2,000 per bag/suitcase limit for each Covered Person with a $10,000 aggregate maximum for all Covered Persons per Covered Trip. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

19. Car Rental Loss and Damage Insurance can provide coverage up to $75,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.

20. Coverage for a Stolen or damaged Eligible Cellular Wireless Telephone is subject to the terms, conditions, exclusions, and limits of liability of this benefit. The maximum liability is $800, per claim, per Eligible Card Account. Each claim is subject to a $50 deductible. Coverage is limited to two (2) claims per Eligible Card Account per 12 month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

21. When an American Express® Card Member charges a Covered Purchase to an Eligible Card, Extended Warranty§ can provide up to one extra year added to the Original Manufacturer’s Warranty. Applies to warranties of five (5) years or less. Coverage is up to the actual amount charged to your Card for the item up to a maximum of $10,000; not to exceed $50,000 per Card Member account per calendar year. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

22. Purchase Protection is an embedded benefit of your Card Membership and requires no enrollment. It can help protect Covered Purchases made on your Eligible Card when they’re accidentally damaged, stolen, or lost, for up to 90 days from the Covered Purchase date. The coverage is limited to up to $10,000 per occurrence, up to $50,000 per Card Member account per calendar year. Coverage Limits Apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

23. Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

24. The secured Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.

25. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.

26. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

27. There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.

28. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

29. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

30. Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.

31. On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

32. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

33. SpotMe® on Debit is an optional, no fee overdraft service attached to your Chime Checking Account. To qualify for the SpotMe on Debit service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your Visa debit card. Qualifying members will be allowed to overdraw their Chime Checking Account for up to $20 on debit card purchases and cash withdrawals initially but may later be eligible for a higher limit of up to $200 or more based on Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Debit limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime’s sole discretion. Although Chime does not charge any overdraft fees for SpotMe on Debit, there may be out-of-network or third-party fees associated with ATM transactions. SpotMe on Debit will not cover any non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe on Debit Terms and Conditions.

34. Tipping or not tipping has no impact on your eligibility for SpotMe®.

35. Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

36. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.

37. Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.

38. Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.

39. Funds are automatically debited from your Checking Account and typically deposited into the recipient’s Checking Account within seconds. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed.

40. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed. Non-Chime members must use a valid debit card to claim funds.

41. MyPay is only offered in select states

42. To be eligible for MyPay, you must receive qualifying direct deposits to your Chime Checking Account as set forth in the MyPay Agreement. A qualifying direct deposit is a deposit from an employer, payroll provider, gig economy payer, government benefits payer, or other permitted source of income by Automated Clearing House (“ACH”) or Original Credit Transaction (“OCT”). Your MyPay Credit Limit and Maximum Available Advance may change at any time. MyPay is a line of credit and available limits are based on estimated income and risk-based criteria. Eligible members may be offered a $20 – $500 Credit Limit per pay period. Your Credit Limit and Maximum Available Advance will be displayed to you within the Chime app. MyPay is currently only available to eligible Chime members in certain states. Other restrictions may apply.

43. Not affiliated with Empower Annuity Insurance Company of America (www.empower.com). Not everyone will qualify. Offers range from $10-$300 for first-time customers; $10-$400 for all others. Offers are based on our eligibility requirements and can go up with on-time payments. In Feb 2025, the average offer was $95 for first-time customers; $187 for all others. Instant delivery is optional—see fees in Empower’s Terms. Empower offers a 14-day trial for first-time customers followed by an auto-recurring $8/month subscription fee. Cancel anytime.

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Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor's credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor's degree in journalism and an MBA.

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What Credit Score Do You Start With? A Beginner’s Guide

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