Building Your Credit Score From Scratch

A credit score is just a number — usually somewhere between 300 and 850 — that tells lenders how risky it is to lend you money. Nobody's born with one. It's built through a handful of pretty unglamorous, repeatable habits, and honestly, most of the "tricks" people obsess over matter a lot less than simply paying on time.

Payment history is the biggest single factor

Payment history is about 35% of a FICO Score, the largest single piece, with amounts owed close behind at about 30%. (Those are FICO's published weights; other scoring models may weigh things a bit differently.) So: pay at least the minimum, on time, every single time. It's not exciting advice — I know — but it's the truth: if you only fix one habit on this page, fix this one.

Then it's about how much of your limit you're actually using

Amounts owed is the next biggest piece, and credit utilization — how much of your available credit you're using — is a big part of it. The CFPB suggests keeping your use under 30% of your limit, and plenty of people aim even lower. This one surprises people, because it generally reflects the balances your card issuer reports, often around your statement date, so it isn't a permanent mark you're stuck with.

The rest matters, just less

Length of credit history rewards older accounts, which is exactly why closing your very first card — even one you barely use anymore — isn't always the smart move. Closing a card can also raise your utilization, since you lose that card's limit. Length of history is about 15% of a FICO Score. Credit mix (say, having both a card and a loan) is about 10%, and FICO says you don't need one of each, so it's not worth taking on debt just to diversify your file. New credit is about another 10%: applying for credit triggers a hard inquiry, which can affect your score, so spacing out applications when you can is worth doing.

Starting from literally nothing

If you've got zero credit history, a few realistic ways in:

• A secured card — you put down a cash deposit (the usual rule is that it sets your limit), which makes approval much easier even with no history at all
• Becoming an authorized user on a family member's older, well-managed card, which may add their history to your file if the card issuer reports authorized users to the credit bureaus (ask before you count on it)
• A store (retail) card, which the CFPB also lists as a way to start building credit — the same pay-in-full habit applies
• Credit-builder loans from a bank or credit union, where you build credit and savings at the same time by making on-time payments that get reported to the bureaus

The one habit that actually builds it

Use a card for stuff you were already planning to buy, then pay the statement balance in full every month. That's genuinely most of it. Carrying a balance doesn't build credit any faster — it just costs you interest for no real benefit.

Checking your own score won't hurt it

Checking your own score or report is a "soft inquiry" and doesn't hurt your credit score. Most banking apps show a score for free these days, so there's really no reason not to glance at it every so often. You can also get free reports from all three credit bureaus every week at AnnualCreditReport.com, which is worth doing now and then to catch errors.

Sources

• myFICO: What's in my FICO Scores? — the 35/30/15/10/10 weights, and that you don't need one of each credit type
• myFICO: Credit Scores — the 300-850 range
• CFPB: Credit score myths that might be holding you back — keeping use under 30%, how closing a card can raise utilization, and that requesting your free reports won't hurt your scores
• CFPB: What are some ways to start or rebuild a good credit history? — secured cards, credit-builder loans, and store cards
• FTC: Free Credit Reports — free weekly reports from all three bureaus through AnnualCreditReport.com
• CFPB: When will my lender run or obtain a copy of my credit report? — hard inquiries can affect your score; soft inquiries do not

This article is for educational purposes only and is not financial advice.