Build credit for your financial future

For many people, maintaining a good credit score can play a key role in enhancing financial security.

Your credit score may determine how you qualify for credit cards, impact your ability to take a mortgage or loan, and even factor into decisions such as buying or leasing a car. It’s important to keep track of how you’re using your credit and take steps to build a strong score. These tips may help you get started.

Get a credit card

To build good credit, you must use credit. Start by charging small amounts you’re confident you can pay back and make payments on time. Credit scores typically run between 300 and 850 – the higher, the better. If you can’t get approved for a credit card because of a low score, opt for a secured card where your credit limit depends on the amount of money you deposit. After you’ve used this card responsibly for a year or 18 months, you should be able to get approved for an unsecured card, which won’t require collateral or a deposit. Keep in mind that applying for too much new credit can have a negative impact on your credit score, so be mindful and apply only for cards you plan to use.

Make timely payments

Paying your bills on time is one of the most important steps you can take to build and maintain good credit. Late or missed payments can have a significant negative impact on your score, and it may take a while to correct any payment issues. Establishing (or re-establishing) a habit of paying your bills on schedule will raise your score over time. As time passes, older late payments will matter less. To avoid dealing with the consequences of late or missed payments, you may want to set up automatic bill payments through your credit card provider.

Pay off debt, if possible

The percentage of your total available credit you use each month—or your credit utilization ratio—also plays an important role in determining your overall credit score. To keep your credit score high, it may help to maintain a credit utilization ratio of 30% or lower.1 One way to lower your credit utilization ratio is to pay off outstanding debts and keep your credit card balances low. This indicates to lenders that you likely know how to manage your money and won’t default on your credit card bill.

Review your credit report yearly

Since your credit score is such an important measure of your overall financial health, it’s important to review your credit report annually to verify that the information listed is correct. One in five Americans finds an error on his or her credit report.2 If you’re concerned about your credit, it may be helpful to verify that a mistake on your report isn’t pulling your score down. All three major credit bureaus (Experian, Equifax, and TransUnion) offer a free report annually through

Be patient, and stay the course

For many credit problems, only time can really help to rebuild your score. The length of time it may take to rebuild your credit history can vary, based on the negative activity in your report. Most public record events remain on your credit report for seven years, and inquiries remain on your report for two years.3 Once you commit to improving your credit, it’s important to be patient and continue to pay your bills on time; your score will gradually improve.

Your credit score can have a significant impact on your finances and your day-to-day life. Use these tips to build, maintain, or improve your score today to help lay the foundation for a lifetime of financial security.