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's important to build a credit score. Most cases, this will require opening a credit card.
Credit mix
A key factor in determining credit scores is the mix of your credit cards. The percentage of revolving credit versus installment credit is a major factor in your overall credit score. Also, credit utilization plays a significant role in your credit score. You will have lower credit utilization percentage if you have a combination of revolving as well as installment accounts.
Payment history
One of the most significant parts of your credit score is your payment history. Your payment history will show lenders how frequently and reliable you pay your debts. It is vital to your credit score, as late or missed payments will lower your score. There are many ways to improve your payment record.
Credit utilization
The credit utilization percentage represents the percentage of credit you've used against your total available credit. This is calculated by taking the total credit limit of all accounts and your current account balance. You can usually find this information by logging into your credit card account. Bankrate.com also offers a credit utilization calculator that can help you calculate it. You can calculate your credit utilization by taking a $500 credit card limit of $5,000, and spending $500 on it.
Credit history length
Credit history has a significant impact on your credit score. Although it is responsible for 15% of your overall score. Other factors can also be taken into account. Your credit history will determine how high your score. Lenders tend to lend to customers with longer credit histories.
Interest rate
If you are new to credit, you might be asking, "What credit rating should you start with?" FICO scores and VantageScores average 300. This is however not where you'll start. In fact, it's likely that your initial credit score will be around the 500 mark. Your credit score will rise quickly as you prove yourself to be a responsible credit shopper.