What is a credit score? Your credit score essentially reflects how much of a financial risk you would be if you were loaned money. Building a good credit score means it will be possible (and easier) to do things like take out a loan, rent or buy a home, and get good rates on auto or home insurance.
You may be wondering how your credit score determined. Credit is determined by five factors:
- Payment History (35%) – Lenders want to know if you’ve paid past credit amounts on time.
- Amounts Owed (30%) – This is the amount you owe on all forms of credit. Is your credit card staying maxed out, or are you paying it off in a reasonable time frame?
- Length of Credit History (15%) – Your credit score also factors in the amount of time you have been building credit. The sooner you start building credit, the better your credit will be!
- Credit Mix (10%) – The mix of credit cards, retail accounts and loans is a small factor in your credit score. It is good to have multiple credit cards but better to just have a couple and be paying them off on time.
- New Credit (10%) – By opening multiple lines of credit in a short amount of time you will be considered a greater risk, it is smart to open new lines of credit slowly over time to keep building your credit.
If you are at least 18 years of age, have been accepted to study at an accredited US college or university, and have a valid F1, J1 or M1 visa you are eligible to apply for your own credit card through SelfScore!