How to Build and Maintain Good Credit in the United States

At Coppel Access, we understand that managing your credit is crucial, especially if you’re new to the financial system in the United States. Whether you’re earning a lot or just getting by, learning how to build and manage your credit can make a significant difference in your financial journey.

Why Does Your Credit Score Matter?

Your credit score plays a big role in your financial life. It can affect your ability to get a car, rent an apartment, secure a home loan, or even get approved for a credit card. A higher credit score can unlock better financial products and lower interest rates, saving you money in the long run. For example, with a score above 750, you might qualify for low-interest car loans or credit cards with 0% introductory rates. In short, knowing your credit score and understanding how it works can help you make smarter financial decisions.

What is a Credit Score?

A credit score is a three-digit number that ranges from 300 to 850. It reflects how likely you are to repay borrowed money and pay bills on time. While 850 is the highest possible score, don’t stress about hitting that number—what matters most is keeping your score in a healthy range, ideally above 700.

Your credit score is based on information collected about your credit accounts. This data is compiled by credit bureaus into your credit reports. The three major bureaus in the U.S. are Equifax, Experian, and TransUnion. It’s important to note that you don’t have just one credit score—you have several, and they might differ slightly because different companies calculate them.

The two main companies that calculate credit scores are FICO and VantageScore. Both use a range from 300 to 850. FICO is the most widely used, but if your VantageScore is good, your FICO score is likely to be strong too.

What Are the Credit Score Ranges?

You might be wondering, what exactly is a “good” credit score? Here’s a general breakdown:

These ranges help lenders decide whether to approve your credit application and what terms to offer you. Your income and other debts also play a role in their decision-making.

FICO and VantageScore Ranges:

• FICO:

• Below 580: Poor
• 580 to 669: Fair
• 670 to 739: Good
• 740 to 799: Very good
• 800 and above: Exceptional

• VantageScore:

• 300 to 600: Subprime (Poor)
• 601 to 660: Near prime (Fair)
• 661 to 780: Prime (Good)
• 781 to 850: Superprime (Exceptional)

What Affects Your Credit Score?

Your credit score is influenced by several key factors, and it’s important to note that things like your race, ethnicity, gender, marital status, age, where you live, and even your employment history, salary, and job title do not impact your score. Instead, the most important factors are:

1. Payment History: Paying your bills on time is crucial. A late payment of 30 days or more past due can stay on your credit report for years and seriously hurt your score.
2. Credit Utilization: This refers to how much of your credit limit you’re using. It’s best to keep your usage below 30% of your total credit limit. The lower, the better!
3. Credit History: The longer you’ve had credit, the better.
4. Credit Mix: Having different types of credit, like a loan and a credit card, can boost your score.
5. Recent Credit Applications: Applying for a lot of credit in a short time can temporarily lower your score. 

How to Improve Your Credit

Improving your credit score involves making smart financial decisions:

1. Pay all bills on time.
2. Keep your credit card balances below 30% of their limits. Better yet, try to pay off your balance in full each month to avoid interest charges.
3. Keep old credit cards open to maintain the average age of your accounts.
4. Space out credit applications to avoid too many hard inquiries, which can temporarily lower your score.

If you’re just starting out or looking to boost your score, consider paying down your credit card balances throughout the month, disputing errors on your credit reports, or asking for higher credit limits to quickly improve your score.

How to Check and Monitor Your Credit

You can check your credit for free without impacting your score. Many personal finance websites like Experian and many banking apps offer free credit scores, making it easy to stay informed. Try to make it a habit to check your score monthly when you log in to pay bills.

Remember, your score might fluctuate, but as long as you keep it in a healthy range, those changes won’t significantly affect your financial well-being.

Take Control of Your Financial Future with Coppel Access

At Coppel Access, we’re committed to helping you build and maintain a strong financial foundation. With our FDIC-insured bank account and Visa debit card, you can confidently manage your money.

Start your journey with Coppel Access today!