A credit score is one of the most important financial numbers in the United States.
It affects your ability to get credit cards, rent an apartment, or qualify for loans.
Understanding how credit scores work is the first step to building strong credit.
What Is a Credit Score?
A credit score is a three-digit number that represents your creditworthiness.
Lenders use it to evaluate how likely you are to repay borrowed money.
In the US, credit scores usually range from 300 to 850.
What Is Considered a Good Credit Score?
Most lenders consider a credit score of 670 or higher to be good.
Scores above 740 are considered very good or excellent and usually qualify for better interest rates.
What Affects Your Credit Score?
What Affects Your Credit Score?
Your payment history shows whether you pay your bills on time.
Late or missed payments can significantly lower your credit score.
Credit Utilization
Credit utilization measures how much of your available credit you are using.
Keeping your usage below 30% is generally recommended.
Length of Credit History
The longer your credit history, the better it is for your score.
Opening many new accounts at once can lower your average credit age.
Credit Mix
Having different types of credit, such as cards and loans, can help your score.
However, you should only open accounts you actually need.
Hard Inquiries
Hard inquiries occur when lenders check your credit for applications.
Too many inquiries in a short time can slightly lower your score.
How Credit Scores Are Used in the US
Credit scores are used by banks, landlords, and lenders.
They affect loan approvals, interest rates, and even rental applications.
How to Start Building Credit
Building credit starts with responsible use of credit products.
Secured credit cards and on-time payments are common first steps.