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Resources >> Education Center >> What Is a Credit Score? Kids’ Definition and Tips for Building Good Credit

What Is a Credit Score? Kids’ Definition and Tips for Building Good Credit

Start Building Your Child’s Credit

A high credit score can make your adulthood easier in many ways. Thinking about it early is an excellent way to maximize the benefits of a strong credit profile and boost your financial stability.

The first step toward credit building is learning the answer to a simple question—“What is a credit score?” Kids’ definition, calculation methods, and all important details are explained in this guide. You’ll learn what score to aim for and how to secure it by managing your money wisely.

Credit Score—Definition for Kids

A credit score is a three-digit number that shows how responsible you are with the money you borrow from a bank. Whenever you want to obtain a loan or buy something in installments, your credit score will determine if you can do it and on what terms. 

The higher your score, the better your chances of borrowing money because lenders won’t see you as a risk. Beyond getting additional funds when you need them, good credit can help you buy a car, rent or buy your desired apartment, and get a job in certain industries.

Credit scores range between 300 and 850. You’ll get your starting score at least six months after taking out your first credit product, and it will evolve with time, depending on your spending behavior and overall financial responsibility.

What Is a Good Credit Score?

Source: PabitraKaity

Credit scores are split into five categories with descriptive grades—here is how they typically range:

CategoryScore
Poor<580
Fair580–669
Good670–739
Very Good740–779
Exceptional780+

Any score above 670 should make you eligible for most loans. Still, you should aim as high as possible because a higher score means better loan terms, such as lower interest rates and longer repayment periods.

You shouldn’t have trouble securing a good score, as your first one will likely be between 500 and 700 if you use your first credit product wisely and don’t make any reckless financial decisions. Estimating the exact score you’ll start with and predicting how it will change is challenging, as there are several factors to consider.

Who Calculates Your Credit Score and How

The three major consumer credit bureaus are responsible for calculating credit scores:

When you want to get a loan or other financial product, the lender will get your credit report from the bureau to assess your score and check for any red flags.

Credit bureaus calculate scores based on the two most popular scoring models:

  1. FICO®
  2. VantageScore®

FICO

The FICO scoring model is the most popular—so much so that people often use the terms “credit score” and “FICO score” interchangeably. There are several versions of the FICO model, with FICO Score 8 being the most widely used.

This model relies on five factors to calculate your score, each carrying a specific weight expressed in percentage values. The following table breaks down the factors and their impact on the score:

FactorExplanationCredit Score Impact
Payment historyIt’s a record of your past repayments showing whether they were made on time, late, or missed. This factor has the largest impact on your score35%
Amount owed/Credit utilizationThe amount owed for loans is how much you owe each lender individually and in aggregate (total). Credit utilization for credit cards is how much of your credit limit you are using, expressed as a percentage—e.g., $300 used of a $1,000 credit limit is 30% utilization. Credit card utilization below 30% is good, and below 10% is ideal30%
Credit history lengthThis factor refers to the amount of time you’ve been using financial products—the longer your credit history, the better 15%
New creditIt shows recent credit accounts and hard inquiries. Note that applying for new credit too frequently or haphazardly might lower your score10%
Credit mixCredit mix refers to the different types of credit accounts you have. Your account should have a mix of revolving (e.g., credit cards) and installment (loans with set monthly payments) accounts—this shows the lenders that you know how to responsibly handle multiple accounts10%

VantageScore

Like FICO, VantageScore has evolved with time, with 4.0 being the latest version. Besides percentage weights, this model assigns influence levels to different credit score factors:

FactorWeightInfluence Level
Payment history41%Extremely influential
Depth of credit20%Highly influential
Credit utilization20%Highly influential
Recent credit11%Moderately influential
Balances6%Less influential
Available credit2%Less influential

VantageScore shares some factors with FICO—payment history and recent credit. Others are slightly different and explained as follows:

  • Depth of credit—It assesses the age of your credit accounts from three perspectives—oldest, youngest, and average. The oldest account gives lenders insight into your borrowing and repayment habits, helping them make a decision about lending you the money
  • Balances—This factor considers the total balances on all your credit accounts, both current and delinquent
  • Available credit—This category looks into the amount of unused credit on your revolving accounts. Keep in mind that larger amounts can raise your credit score slightly

Both VantageScore and FICO scores range from 300 to 850, so the only difference lies in the calculation methodology. Regardless of these differences, the rules for securing and maintaining a high credit score boil down to a few smart financial choices and habits.

How To Maximize Your Credit Score

Source: Mikhail Nilov

Borrowing money from a bank involves a great deal of responsibility. You’re spending someone else’s money that you have to repay, and any poor spending decisions damage your chances of getting future loans.

The good news is that such decisions are easily avoidable—you can build a remarkable credit profile by following a few simple tips:

  • Make timely payments—Regardless of the scoring model, payment history is by far the most important determinant of your credit score. A single missed payment can stay on your report for up to seven years even if you make all other payments timely
  • Use credit funds as a last resort—Ideally, your credit utilization won’t exceed 30%. Overspending borrowed money means that you don’t have a firm grasp of your finances, which is something every lender will hold against you
  • Only apply for new credit when you need it—Opening new accounts or making hard inquiries haphazardly shows lenders that you have a constant need for additional funds and damages your reliability as a borrower

When To Start Building a Credit Score

Both credit scoring models look at your credit history length, so building credit early can give you a significant advantage. While this may seem like an adult matter, starting in your teens is highly recommended.

You may struggle to get started with credit, though, because minors and young adults typically don’t have access to financial products that help them build it. As imposed by the CARD Act of 2009, you can only get a credit card before turning 21 if you meet one of these conditions:

  1. You can prove that you can repay the debt independently
  2. You have a co-signer over 21 who can repay it if you’re unable to 

Many children can’t check either box, so parents jump in by adding them to their credit cards as authorized users. In this case, you would get a credit profile sooner than you could independently. The problem is, you only build credit while you’re registered on the parent’s card. Once you’re removed, all credit history associated with the card gets deleted from your profile, so you’re back to square one.

Luckily, parents can opt for a more effective way of helping their children build credit—FreeKick.

Use FreeKick To Build Your Child’s Credit and Protect Their Identity

With so many restrictions on minors obtaining credit cards, a service like FreeKick that provides credit building features is the workaround you need. Offered by Austin Capital Bank, FreeKick is an FDIC-insured deposit account that helps you build credit for your child while also protecting the identities of your whole family.

Three Steps for Using FreeKick’s Credit Building Service

FreeKick’s credit building service is available for children aged 13 to 25. Take the following three simple steps to help your child establish a credit history early on in life:

  1. Create an Account—Go to FreeKick.bank, sign up for an account, and choose a deposit that suits your budget
  2. Set It and Forget It—FreeKick will start building 12 months’ worth of credit history for your child
  3. Keep Growing—After 12 months, you can either close the account without any fees or choose to continue building credit for your child for another year

This service gives your child a credit head start of up to five years when they turn 18, which will help them save $200,000 during their lifetime through favorable loan terms and other financial perks.

How FreeKick Protects Your Child’s Identity

Child identity theft happens every 30 seconds, and without a secure identity, your child’s credit profile will be standing on a shaky foundation. This is why it’s important to invest in identity protection when you’re trying to give your children a bright financial future. FreeKick’s identity protection services include:

Services for MinorsServices for Adult Children and Parents
Credit profile monitoring
Social Security number (SSN) monitoring
Dark web monitoring for children’s personal information
Up to $1 million identity theft insurance
Full-service white-glove concierge credit restoration
Sex offender monitoring—based on sponsor parent’s address
Credit profile monitoring
SSN monitoring
Dark web monitoring for personal information
Up to $1 million identity theft insurance
Full-service white-glove concierge credit restoration
Lost wallet protection
Court records monitoring
Change of address monitoring
Non-credit (Payday) loan monitoring
Free FICO® Score monthly
FICO® Score factors
Experian credit report monthly

What FreeKick Costs

FreeKick offers two pricing plans:

FDIC-Insured DepositAnnual Fee
$3,000$0 (Free)
No deposit$149

With both plans, you get:

  1. Credit building for six children aged 13 to 25
  2. Identity protection for two parents and six children aged 0 to 25

Say goodbye to credit card hassle and help your child establish a good credit profile—sign up for FreeKick today.

Featured image source: PiggyBank



Freekick provides a double dose of financial empowerment and security for your whole family. It helps teens and young adults build strong credit profiles and offers identity motoring for up to two adult parents and six children under 25.

Freekick: ID Protection & Credit Building

Protect Your Family’s Identities
Safeguard up to 2 parents & 6 children
Build Your Child’s Credit
Build credit for your children ages 13-25. Good credit can save them $200,000 over their life!
Pay $0 A Year
Make a one-time deposit of $2,500 or pay $149/year with no deposit
Powered by Austin Capital Bank
FreeKick is a combination of a FDIC-insured deposit account, credit building, & identity monitoring services

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