Why high school students do not have a “beginning credit score”

Dear Experian,

I teach seniors in high school. They want to know what a beginning credit score would be if you’ve just turned 18 and you are applying for your first credit card.



Dear RRY,

A simple way to think about credit reports and credit scores is by comparing them to school papers and grades. The differences between the two can help clarify for your students that they don’t have “beginning” credit scores.

When you give an assignment, your students complete it and turn in the paper, which you then grade. In credit terms, a person’s credit report is like the student’s paper. A credit score is like the grade.

The grade you give represents an analysis of the quality of the information in the student’s paper. In a similar way, a credit score represents the quality of an individual’s credit report and the relative lending risk associated with the information.

Taking the analogy a bit further, your students can’t have a grade until they complete a paper and turn it in to you. Similarly, in order to have credit scores calculated, your students must have credit reports.

If they have never had credit issued in their name, they would not have a credit history, and credit scores could not be calculated.

The analogy doesn’t work as well when it comes to how credit scores are calculated. With a school grade, you start with a given point value and deduct from it. But that’s not what happens with credit scores.

Credit scores weigh all of the information in a credit report. Positive account information helps improve the score, negative information hurts it. The impact of any one element is dependent on its relationship to everything else in the credit report.

Further complicating the issue is that there are many different credit scores used by lenders depending on the type of lending they do and the kind of lender they happen to be. For instance, there are different credit scores for auto lending and mortgage lending, and there are different credit scores used by local credit unions and large national banks.

Additionally, some of your students may already have other types of credit, for example a car loan cosigned by their parents or a joint credit card with their parents. Others may have no credit at all. Each student may also be applying for a credit card from a different provider, meaning the scores used by those providers could be different.

As a result, there is no universal “beginning credit score” that Experian could provide.

However, there is one fundamental fact that is true for all credit scores: they all use the information from your credit report to do the calculation. And, they will all provide up to five factors in your credit report which most influenced your risk position.

A good exercise for learning about credit scores might be to have your students request their credit reports and purchase at least one credit score to get a good idea of where they stand in terms of credit risk. Some may find they have no credit history at all. Others may have some existing credit but not enough to calculate a credit score. Others might have well established credit histories and strong credit scores.

Your students could compare the numbers they receive, where their number falls in the range of risk for that scoring model, and more importantly, the risk factors they receive with the credit scores. The factors serve as a guide to what you can improve about the way you manage credit to lower your risk.

The lesson to take away is that all credit scores are driven by their credit report, and that they are responsible for managing their credit. By paying their debts on time and as agreed and not taking on too much debt they all can build and maintain great credit scores.

Thanks for asking.

- The “Ask Experian” team

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