How soon after opening your first credit card will your score be created?
How soon after opening your first credit card will your score be created?

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If you’re trying to get your first credit score, you might feel like you’re stuck in a loop.

You need a credit history to build a credit score, but you need a credit score to access credit and build a credit history. If this hurdle has left you with no credit score, you’re not alone. Approximately 45 million adults are “credit-blind”, which means they do not have a credit score or their records do not contain enough information for a credit score.

While establishing good credit can be difficult, it is not impossible. If you use the tools available, you may be able to establish a useful credit score after about six months. Here’s everything you need to know about getting a credit score after opening your first credit card.

What happens to your credit score after opening a credit card?

If you’ve never borrowed money from a lender or used a credit card to make purchases, your credit report may not contain enough information to generate a credit score. But when you start making (or missing) payments, your issuer may flag any or all three major credit bureaus.

So where exactly does your credit score come from? “Think of when you were in school and did an assignment,” says Rod Griffin, senior director of public education and advocacy for Experian. “The paper is like the credit report, and the teacher is a bit like the lender, and they evaluate the information in the report and assign a grade. The grade is a bit like a credit score.

Now imagine you have hundreds of teachers grading the same article because you don’t have just one credit score. Based on a variety of different scoring models, you have hundreds of different credit scores. Your FICO scores are the most important, though – they’re used by 90% of the best lenders to assess your creditworthiness.

You can expect to wait at least six months for a FICO score after opening your first credit card.

However, with new tools like Experian Go and Experian Boost, “We are able to capture these positive payments going back as far as 24 months” to instantly generate a credit score, notes Griffin. Experian Go offers personalized advice to build your credit score, and Experian Boost lets you add your one-time payments to your Experian report. So if you pay your utility bills or streaming services on time, you might be able to get a credit score sooner. Keep in mind that your insurer or lender may use a different FICO score than Experian Boost increases.

Why do you need a credit score

“Having a credit report and a credit score is really about having access to non-predatory lending services at a lower cost and being able to actually achieve your financial goals,” says Griffin. Your credit score affects your life in several ways:

  • Loan: “When you have a credit history, it helps you get things like mortgages and credit cards,” says Griffin. Without a credit score, it will be much more difficult for you to obtain a loan for a house or a vehicle.
  • Job: “Many employers view your creditworthiness as a sign of responsibility,” says Bola Sokunbi, Certified Financial Education Instructor, Author and Founder of Clever Girl Finance. Keep in mind that an employer can’t actually see your credit score, but they can see certain details about your credit reportincluding debt payment history.
  • Assurance: Insurers use your credit-based insurance score to determine your premiums in most states, due to a correlation between bad credit and dollars paid on claims.
  • Rent an apartment : Most landlords will perform a credit check when evaluating your rental application to ensure you are financially sound.
  • Utility costs: Your credit score may affect connection fees or the security deposit required to get utilitiesbecause utilities are considered a form of credit.
  • Convenience: “Every day we are leaning more and more towards a cashless society,” says Sokunbi, noting that some retailers already do not accept cash. “To have a credit card, you must have good credit.”
  • Protections: You can get benefits like travel insurance and fraud protection when you use a credit card — and you’ll need a credit score to qualify, Sokunbi says.

How to increase your credit score

When your goal is to build your credit, there are a few healthy habits that will help you succeed in increasing your score:

  • Pay on time: “Paying off your balance in full each month if you’re able or at least making payments on time each month” will help you maintain a good credit score, Sokunbi says.
  • Keep your balances low: Always try to keep your credit utilization rate below 30%. If necessary, pay off your balance several times a month. And if your credit card issuer raises your limit, let them, but don’t start spending more as a result.
  • Avoid too many applications: “You don’t want to take on a lot of new debt at once, or at all,” says Griffin. Too many inquiries on your credit report make it look like you’re desperate for credit.
  • Use credit creation tools: If you don’t qualify for a credit card, try a credit builder loan or consider becoming an authorized user on a friend or family member’s account.

Pro tip

You can use Experian Boost to get credit for your one-time telecom or utility payments.

How to choose your first credit card

When you’re ready to get your first credit card, know that you may not have access to the best rates and terms. “Looking at interest rates, watching how that interest is going to be compounded” will help you understand what it will cost to maintain a balance, Sokunbi says. You will also want to be aware of the fees associated with maintaining the account.

When choosing a credit card, “you’re not just looking at the costs associated with that account, but also the benefits to you,” says Griffin. Try to pick a card that matches your lifestyle. For example, if you’re supporting a large family, choose a credit card that lets you cash back on groceries. Or if you’re traveling abroad, choose a card with travel insurance and no foreign transaction fees.

Best first credit cards

If you don’t qualify for a traditional unsecured credit card, you may qualify for a student credit card, which usually has more relaxed credit requirements, or a secured credit card, which requires a deposit. initial. Even some unsecured cards are designed for people with no credit history to start building credit and can help you get a great credit score. Choose the best option available to you in terms of rates, fees, credit limit, benefits and rewards. Here are some of our top picks.

  • Introductory offer:

    N / A

  • Annual subscription :

    $0

  • Regular APR:

    20.24% to 29.74% (Variable)

  • Recommended credit:

    (No credit history)

  • Apply now external link icon On Petal’s secure site
  • Introductory offer:

    N / A

  • Annual subscription :

    $39

  • Regular APR:

    27.24% (Variable)

  • Recommended credit:

    (No credit history)

  • Learn more external link icon On the secure site of our partner
  • Introductory offer:
  • Annual subscription :

    $0

  • Regular APR:

    23.24% variable

  • Recommended credit:

    (No credit history)

Petal 1 Visa

The Petal 1 Visa is an unsecured credit card that you may qualify for even without a credit history. Petal uses an alternative approval process, which assesses more than your credit score. Information such as income and regular monthly payments can help determine your eligibility when you provide your bank account information with your application. It doesn’t come with cash back on every purchase, but you can earn rewards at participating retailers. You may also qualify for a credit limit increase after six months of on-time payments. The variable APR is relatively high at 20.24%-29.74%, but there are no annual fees or foreign transaction fees.

Capital One Quicksilver One

The Capital One QuicksilverOne credit card is an unsecured credit card that is available to people with fair credit. It comes with a $39 annual fee, but you’ll get unlimited 1.5% cash back on every dollar you spend. Capital One also reviews your account for a line of credit increase after the first six months. There are few other benefits and the variable APR is relatively high at 27.24%, but it’s a great starter card that gives you the ability to rack up rewards.

Discover it® Secure card

The Discover it® Secure Card is unique in that it offers 1% cash back on all purchases plus 2% cash back on your first $1,000 in combined gas station and restaurant purchases each quarter, whereas many cards secured are not accompanied by a rewards program. The variable APR is relatively high at 23.24%, but there is no penalty APR. After opening an account, you’ll need to make a refundable deposit of between $200 and $2,500, depending on what you want your credit limit to be. And after just seven months, Discover will review your account to determine if you’re eligible to switch to an unsecured card account. It’s a great way to get your foot in the door and start building your credit.

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