Building A Credit Score

Building a credit score is not as daunting as it seems. You need to add a few pros and cons to your list of building credit scores and you’re good to go!

What Is a Credit Score?

A credit score tells your creditworthiness to the lender. It helps them decide whether you are eligible for a loan or not, or for issuing you a credit card.

The score should be between 300-85 which is calculated on your past credit history by the credit bureaus. There are three credit bureaus:

  • TransUnion
  • Equifax
  • Experian.

Credit bureaus issue a credit report based on your payment history, debt, loans and so on.

What Should Be Your Credit Score Target?

You should aim for anything above 680. An average American has a credit score of 700.

Coming back to our question of the hour:

How To Get Started on Building Credit Score.

Here’s a step by step process-

1.    Applying For a Secured Credit Card

Secured means you have to give money as collateral, issuing you a credit card.

Secured credit cards are easily issued as the lender does not have to worry about you being a defaulter.

Therefore, you can get it even though you have no credit.

2.    Authorized User

Get yourself added as an authorized user on someone else’s card even though you don’t use it. Add yourself to someone’s card which has a good credit history. This looks good in the eyes of the credit bureaus.

3.    Consistency in Bill Payments

Make sure to pay all your bills before the due date and be consistent in it. It has a great impact on your credit score.

4.    Think Long Term

Apply only for those credit cards which you intend to keep and use for a long time. Credit bureaus lower your credit score every time you apply for one.

Special note– Not every company reports its customer’s credit card history to credit bureaus, so make sure to apply for one who does.

Another question that needed an answer:

Why go through such a grueling process of building a credit score?

To simplify, nothing is possible without a credit score in the US. You’ll need it for a mortgage, car loans, phone plans, business loans, personal loans, and whatnot!


You have reached a point where you learned that there are chicken and egg questions in the credit system. You need credit to build credit.

It takes six months to evaluate your very first credit score and this is just the start of the race.

Building a good credit score takes time, patience, and financial discipline.

It’s a complex system to follow with interest fees, different rates, and whatnot but with basic hardcore rules, you’ll do good in this race of credit score.