By Manuel Tovar, 11th of June – Hispanic Solutions Group
Users wonder how long does it take to create a credit score? Today we give you some basic scopes.
Contributing with the best orientation to users through its specialists, Hispanic Solutions Group, provides you with the following information in order to help you achieve your financial goals in a positive way.
As is known, credit scores they are the reference tool lenders use to assess the risk of doing business with you. A good credit score means good financing offers. Low credit scores mean less attractive offers and terms. And while many consumers rightly focus on building a credit history, it’s also important to focus on building a credit score at the same time. There is no universal answer to the question, “How long does it take to create a credit score?” Instead, the time frame will be a bit different than your peers.
As you can see, almost everyone creates their own credit reports from scratch. And it’s the information on your credit report that ultimately determines the credit scores you’ll get. The quality and comprehensiveness of the information on your credit reports, even when relatively recent, will determine your credit scores now and for decades to come.
Varies for everyone, but no one starts from scratch
If you’ve ever heard someone claim that they have a zero credit score, that would be an inaccurate credit myth in fact. It is impossible for you or anyone else to have a numerical credit score of zero, no matter what certain personalities may claim from personal finance.
For example, the most common credit scoring models used by lenders, the credit scores of FICO and VantageScore, have a credit score range of 300 to 850. Some of the other FICO credit score variants scale from 250 to 900. As you can see, zero does not fit into either of these ranges.
Your credit score also does not start at the bottom of the range of a scoring model. For example, you don’t start with a FICO score of 300. On the contrary, you don’t start with a perfect score either.
Instead, the first time you qualify for a credit score, that score will be calculated based on the information in your credit report, and that score can fall anywhere in the lower end of the range to somewhere below the 700.
Developers design credit scores to predict the likelihood of a 90-day late or worse credit obligation in the next 24 months. If a scoring model determines that you are a high credit risk, your score will be at the lower end of the range. But if your credit report evaluation indicates a lower level of risk, your score will be higher.
The reason you likely have an initial credit score no higher than 700 is that your credit report will be very new or “young” and your report will not have the credit mix needed to achieve higher scores. Young credit reports score lower than credit reports that have decades of experience.
How to qualify for a credit score
Before you can qualify for a credit score, your credit report must meet the minimum requirements of the scoring model. To meet the minimum requirements for a FICO® Score, your credit report must include at least one undisputed credit account (not a collection account) that has been:
- open for at least six months.
- updated in the last six months.
Qualifying for a VantageScore credit score is so much easier. You may be eligible for a score under the VantageScore credit scoring model if your credit report includes at least one account, regardless of its age.
With credit scores of FICO and VantageScore, your credit report cannot contain any indication of your death. If your credit report indicates that you are deceased, you will not qualify for either type of credit score.
Before applying for your first account, what you should know:
Each and every one of us has at least one thing in common: We all build credit from scratch. Building credit can be easy and stress-free if you approach the task in the right way, say the specialists. For example, you don’t want to start applying Credit cards with premium rewards (or any other financing that requires an excellent credit score) right from the start. Instead, you want to focus on applying for accounts from lenders who are comfortable doing business with people who are new to credit.
It is also wise to check your three Experian credit reports, TransUnion and Equifax before applying for financing to make sure your data is accurate. You may believe that your credit reports are blank, but it is important to verify that assumption before completing new applications.
You can access your three credit reports for free at AnnualCreditReport.com. According to the Fair Credit Reporting Act, you can claim these reports once every 12 months. Currently, the three major credit reporting agencies are offering free weekly credit reports to all American consumers through at least April 2022 in response to the COVID-19 pandemic.
If you find errors in any of your credit reports, you can contact the credit reporting agencies. From there, you can file a dispute and the credit bureaus will have to investigate your claim and send you a response, usually within 30 days or less. This process is free.
We invite you to follow our social networks: LinkendIn, Facebook, Twitter and Instagramto find more information related to finances. Also on our YouTube channel The Credit Channel to learn how to improve your credit. If you need help in disputing debts that do not belong to you, call us at (612) 216-1599.