New to the US? Our top 3 tips to boost your score
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What's a credit score anyway?
Official definition
"A prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports."
— Consumer Financial Protection Bureau, consumerfinance.gov1
Good vs bad scores
Credit scores go from 300 to 850. These numbers can feel a bit like Fahrenheit vs Celsius: you probably don't have an intuition for the numbers yet. Here's a quick overview of who's typically in each range.
| Range | Who's typically here |
|---|---|
| 300–579 (Poor) | Allegedly, Mike Tyson when he filed for bankruptcy in 2003.2 |
| 580–669 (Fair) | Americans with a few late payments or cards near their limit. Most lenders will still approve you, but at higher rates and with bigger deposits. |
| 670–739 (Good) | Right around the US average of ~713. Always paid on time. Enough for most cards and a mortgage, just not at the best rates. |
| 740–799 (Very Good)You after 6 months, but with good habits | Where financially successful Americans regularly land. This is where the best rates, no deposits, and the easiest approvals begin. |
| 800–850 (Exceptional) | Taylor Swift is allegedly up here3. You don't have to be a Swiftie to reach this bracket. Newcomers can take about 2-3 years to get here if they take care of their credit.4. |
To get a score, you need to thicken your credit file
Many banks and landlords refuse to assign you a score, even if you already have your first credit card. They look at how many credit accounts you have, and how long you've had them. As a newcomer, you get treated as a so-called “thin file”. Thin file = no score.
There is no US-wide definition of what a thin-file is. This can lead to weird situations for newcomers: Credit reporting apps like Credit Karma tend to be more lenient with thin files and already show you a credit score. However, landlords, leasing companies or other lenders often require up to half a year of credit history before assigning you a score. They will refuse you telling you that you don't have a credit score yet.5
While there is no common definition, you can use the following as a reference:
Thin file
- Fewer than 3 credit accounts1
- Under six months of history2
Thick file
- 3 or more credit accounts1
- More than six months of history2
WHERE TO NEXT
Build a thicker credit file.
Answer a few questions and get a plan for opening the right credit accounts for your situation.
What makes a good score?
The credit scoring system is confusing
Did you know that there isn't just one official credit score? There are at least a dozen. To understand that, we need to take a look under the hood. Who reports your credit data? And how is it turned into a score?
We've broken it down for you in this interactive walkthrough:
Five factors make up your credit score
Different scores weigh different data points differently. You will most often see the below split, based on the “FICO 8” score, one of the most important and representative scores. Other scores may weigh differently, but the basic principles are the same.1
Where to next
Now apply this to your own situation.
Answer a few questions and get a plan built for your situation. Or read about SettleKit first if you want to know who we are.
FAQ
Frequently asked questions
Probably not yet. A score typically needs about six months of US credit activity before the first one is generated. If you haven't opened a US credit account, you have no score on file for now. See the three options at the top to get started.
No. Having an SSN doesn't create a credit file. You only get a score once an institution (usually your first credit card issuer) reports your activity to the credit bureaus.
Yes. A card opened with an Individual Taxpayer Identification Number (ITIN) builds a real credit file. Pull your free annual report at AnnualCreditReport.com to see what's on it.
It's the difference between FICO and VantageScore. FICO needs about 6 months of credit history before it can generate a score. VantageScore can produce one almost immediately. Different apps use different scoring models.
Use the free annual report from each of the three credit bureaus at AnnualCreditReport.com. It shows exactly what's on file. Then match what you see to the three situation cards at the top.
No. Your home-country credit history doesn't transfer. Your US credit file starts from zero. (See the three options at the top for one workaround.)
This guide is based on publicly available research and is intended for general informational purposes only. It is not financial or legal advice. Credit scoring practices, eligibility, and program terms vary by lender and can change over time. When in doubt, consult a nonprofit credit counselor or a licensed financial professional.
Sources used in this guide: