Let’s start  first by identifying what are the factors that determine your credit score:

FIVE factors determine your credit score:

  1. 𝐏𝐚𝐲𝐦𝐞𝐧𝐭 𝐡𝐢𝐬𝐭𝐨𝐫𝐲 (𝟑𝟓%): tracks whether or not you pay your bills on time

2. 𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐝𝐞𝐛𝐭 (𝟑𝟎%): The debt you currently carry compared to the available credit. Aim at having a credit utilization of less than 30%

3. 𝐂𝐫𝐞𝐝𝐢𝐭 𝐡𝐢𝐬𝐭𝐨𝐫𝐲 (𝟏𝟓%): how long have you had accounts open for. Having a long credit history helps you as it shows that you have experience managing your credit. This why closing older credit cards may not be a good idea.

4. 𝐍𝐞𝐰 𝐜𝐫𝐞𝐝𝐢𝐭 (𝟏𝟎%): hard inquiries vs soft inquiries. Having hard inquiries in a short period of time can lower your score.

5. 𝐓𝐲𝐩𝐞𝐬 𝐨𝐟 𝐜𝐫𝐞𝐝𝐢𝐭 𝐮𝐬𝐞𝐝 (𝟏𝟎%): The current mix of debt that you hold. Installment vs revolving accounts.

 Here are 3 tips to increase your credit score:

  1. Pay your bills on time
  2. Check your credit report once a year
  3. Work on reducing your credit utilization 

Here are some tips to maximize your credit score

You know the importance of having a good credit score and how it affects your interest rate (among other factors). So here are three tips that you can do right now.

 1. 𝐃𝐢𝐬𝐩𝐮𝐭𝐞 𝐚𝐧𝐲 𝐦𝐢𝐬𝐭𝐚𝐤𝐞𝐬: That’s right! If you noticed an error or fraud, contact the credit bureaus directly to inform them of your current situation. They will guide you through the process.

2. 𝐎𝐩𝐞𝐧 𝐚 𝐬𝐞𝐜𝐮𝐫𝐞𝐝 𝐜𝐫𝐞𝐝𝐢𝐭 𝐜𝐚𝐫𝐝: This is helpful when your credit is non-existent or you are trying to improve your credit

3. 𝐃𝐢𝐯𝐞𝐫𝐬𝐢𝐟𝐲 𝐲𝐨𝐮𝐫 𝐜𝐫𝐞𝐝𝐢𝐭: carry revolving credit (credit cards) and installment credit (loans)

Building credit takes time and consistency. That’s why if you want to achieve the best interest rate, you could start taking steps now to maximize the best interest rate. Here are the credit scores you should aim for:

Good: 658-719

Very good: 720-780

Excellent: 781-850

How Secured and Unsecured Credit Cards can Help you Build Credit?

A credit card for any situation.

Depending on what you are trying to achieve and your credit score, a secured or unsecured cc can help you improve your credit. Here is why:

Secured credit cards are good for building credit or when your credit is non-existent

However, you will be required to pay a security deposit and the APR is higher than unsecured cc (in most cases)

On the other hand, unsecured credit cards don’t require a security deposit and usually, the APR ranges 13.99%-24.99%

You can start working on your credit score with any of these two options. Just remember to read and understand the guidelines for the secured credit card.


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