In the US, your credit score is far more than a number. It shapes apartment approvals, car and mortgage rates, and sometimes even jobs and phone plans. A high score saves you thousands in interest; a low one can mean outright denial. Here's how it works and how to raise it.
Score ranges — where do you stand?
The most-used FICO score runs 300–850.
| Tier | Score | Meaning |
|---|---|---|
| Excellent | 800–850 | Best terms, lowest rates |
| Very Good | 740–799 | Strong, usually approved |
| Good | 670–739 | Above average |
| Fair | 580–669 | Approved but higher rates |
| Poor | 300–579 | Denials, high deposits |
740+ gets you great terms; first target is to clear 700.
What 100 points is worth
| Situation | Low score (~620) | High score (~760) |
|---|---|---|
| Car/mortgage rate | Higher rate | Lower rate |
| Total interest | Thousands more | Thousands less |
| Apartment rent | Bigger deposit, denials | Easy approval |
| Credit cards | Low limits, weak rewards | Top rewards cards |
Before a big loan (mortgage, car), a few months of score-building can save serious money on interest.
Your score is built from 5 things
| Factor | Weight | What it is |
|---|---|---|
| Payment history | 35% | Paying on time — the biggest lever |
| Utilization | 30% | Balance vs limit (lower is better) |
| Length of history | 15% | Keep accounts open and aging |
| New credit | 10% | Many new accounts quickly = ding |
| Credit mix | 10% | Cards, loans, etc. |
Key. 65% of your score is "pay on time" + "utilization." Never miss a payment and keep balances under 30% of your limit (ideally under 10%), and most of the score takes care of itself.
7 ways to raise it
- ① Always pay on time — autopay. A single 30-day late hurts a lot.
- ② Keep utilization under 30% — on a $1,000 limit, stay under $300. Paying before the statement date helps.
- ③ Keep old cards open — don't close them (preserves history and limits).
- ④ Don't open too much at once — repeated hard inquiries ding you.
- ⑤ Build history — no credit? Start with a secured card or as an authorized user.
- ⑥ Check your report — free yearly at annualcreditreport.com; dispute errors/fraud.
- ⑦ Ask for a limit increase — lowers utilization (keep spending flat).
Just starting out
New to the US with no history? You may be denied for having no score. Start with a secured card, charge a little, pay in full on time, and in 6–12 months you'll have a score and can move to a regular card. Note: credit history from another country does not carry over, so begin building right away.
4 common myths
- "Carry a balance to build score" — false. You just pay interest. Pay in full.
- "Higher income = higher score" — income isn't in the formula; habits are.
- "Checking hurts your score" — your own (soft) check has no effect; only lender (hard) pulls do, slightly.
- "Debit cards build credit" — no; use a credit card.
FAQ
Does not using a card raise the score?
No — credit is built by using and repaying. Charge a little and pay in full on time.
I pay in full but utilization looks high?
Issuers may report the statement-date balance. Pay before that date to report a lower balance.
Where do I see my score free?
Most bank/card apps show a free FICO or score; get your full report at annualcreditreport.com.
65% of your score is "pay on time + low utilization." Autopay and staying under 30% do most of the work — credit is a marathon, not a sprint.
This is general information, not financial advice. Scoring models and criteria vary — check with your issuer and the bureaus. See also US health insurance and US mortgages.
