How to build a credit score in the US?

Learn how to build a credit score in the United States

Building a credit score in the United States can feel overwhelming, especially for newcomers or young adults just starting their financial journey. Yet, having a solid credit history is one of the most important steps toward achieving financial independence.

A good credit score not only improves your chances of getting approved for loans or credit cards but also helps you access better interest rates, rent an apartment, or even secure certain jobs.

In this guide, we’ll break down what a credit score is, why it matters, and practical strategies you can use to start building and improving yours in the U.S.

What Is a Credit Score and Why Does It Matter?

A credit score is a three-digit number, typically ranging from 300 to 850, that represents your creditworthiness, essentially, how reliable you are in paying back borrowed money. Lenders, landlords, and even some employers use it to determine the risk of doing business with you.

The most common credit scoring model in the U.S. is the FICO Score, which considers several factors:

• Payment history (on-time vs. late payments);
• Credit utilization (how much of your available credit you use);
• Length of credit history;
• New credit inquiries;
• Types of credit accounts (credit cards, loans, etc.).

In general, a score above 670 is considered “good,” while scores above 740 are “very good” or “excellent.” The higher your score, the better terms you can secure when borrowing money.

Step 1: Open a Credit Account

To build a credit score, you first need a credit account that can be reported to the three major U.S. credit bureaus: Experian, Equifax, and TransUnion. If you’re just starting, you may not qualify for a traditional credit card.

Step 2: Pay Your Bills on Time

Your payment history makes up the largest percentage of your credit score, about 35%. That means even one missed or late payment can significantly hurt your progress.

Consistency is the foundation of a strong credit score.

Step 3: Keep Credit Utilization Low

Credit utilization refers to how much of your available credit you are using. For example, if you have a $1,000 credit limit and you spend $600, your utilization is 60%. Experts recommend keeping this ratio under 30% — ideally under 10% — to show lenders that you manage credit responsibly.

You can lower utilization by:

• Paying down balances before the statement closes;
• Asking for a credit limit increase (as long as you don’t increase your spending);
• Spreading expenses across multiple cards.

Step 4: Avoid Too Many Applications at Once

Every time you apply for new credit, the lender performs a “hard inquiry,” which temporarily lowers your score. Too many applications in a short period can signal financial distress. Instead, apply for new credit strategically and only when necessary.

If you’re shopping for a mortgage or auto loan, try to submit applications within a short timeframe (about 14–45 days). The credit scoring system will treat multiple inquiries of the same type as one, minimizing the impact.

Step 5: Diversify Your Credit Mix Over Time

While this step is not immediate, having a variety of credit types can strengthen your score in the long run. For example, combining a credit card, a car loan, and a student loan shows lenders you can handle different financial obligations.

However, never take on debt just for the sake of variety — only borrow what makes sense for your situation.

Step 6: Monitor Your Credit Regularly

Monitoring your credit report helps you stay on top of your progress and catch errors that could hurt your score. By law, you can access one free credit report per year from each of the three bureaus.

Additionally, many banks and credit card companies provide free credit score updates. Watching your score grow can be motivating and helps you spot any suspicious activity early.

Final Thoughts

Building a credit score in the U.S. takes time, patience, and discipline. By starting small — opening your first credit account, paying bills on time, and keeping balances low — you’ll lay the groundwork for a strong financial future. Over time, with consistent effort and smart financial choices, your credit score will improve, opening doors to better opportunities and greater financial freedom.

Remember: your credit score is not just a number, but a reflection of your financial habits. The earlier you start building it, the more benefits you’ll reap in the years ahead.

Written by

Juliana Raquel