What a credit score measures
Your score is a summary of how you’ve handled borrowing in the past. The biggest factors are whether you pay on time, how much of your available credit you use, and how long you’ve had credit.
Five habits that build credit
You don’t need a large loan to get started. Consistency matters far more than size.
- Pay every bill on or before its due date — set up reminders
- Keep card balances below 30% of your limit
- Don’t apply for lots of credit in a short time
- Keep older accounts open to lengthen your history
- Check your report each year and dispute errors
Starting from zero
If you have no history, a small credit card used for one regular bill and paid off in full each month is one of the simplest ways to begin. After six to twelve months of on-time payments, most people see a meaningful score.
When you’re ready to borrow
A good record unlocks lower rates. Before applying for a loan, look at the monthly payment, not just the rate, and make sure it fits comfortably in your budget.