It is possible that you don't know your credit score if credit has never been used before. You need to learn quickly how to build good credit. There are many steps that you can take to build your credit score. It is important to start building a credit record. This usually requires opening one or more credit cards.
Credit mix
The mix of your credit accounts is a very important factor in determining your credit score. Your overall credit score is affected by the proportion of installment credit compared to revolving. In addition, your credit utilization is a major component of your credit score. If you have a mix of installment and revolving accounts, your credit utilization percentage will be lower than if you have a mix of only installment accounts.
History of payments
Your payment history is an important part of your credit score. Your payment history tells lenders how reliable and often you pay your bills. It is essential to your credit score. Late payments and missed payments can lead to a lower score. There are several ways to improve the payment history.
Credit utilization
The credit utilization percentage represents the percentage of credit you've used against your total available credit. It is calculated by taking your current credit limit and dividing it by your current balance. You can usually find this information by logging into your credit card account. Bankrate.com has a credit utilization calculator you can use to calculate it. For example, if you have a credit card with a $5,000 limit and have spent $500 on it, your credit utilization is ten percent.
Credit history length
Your credit score will be affected by your credit history. While it accounts for 15%, there are other factors that can impact your credit score. Your credit history is more important than your score. Lenders prefer to offer loans to customers with a longer credit history.
Interest rate
If you are new to credit, you might be asking, "What credit rating should you start with?" FICO and VantageScore have an average score of 300. However, this is not the place you should start. In fact, it's likely that your initial credit score will be around the 500 mark. You will see a rise in your credit score as you demonstrate responsible credit use.