A good credit score is essential for financial success in the U.S. It helps you rent apartments, get better interest rates on loans, and even apply for jobs. Since international students start with no credit history, building and maintaining a good score is crucial. Here are ten important tips to help you establish and improve your credit score.
1. Understand How Credit Scores Work
Your credit score (FICO Score) ranges from 300 to 850 and is based on:
- Payment history (35%) – Paying bills on time is the most important factor.
- Credit utilization (30%) – How much of your credit limit you’re using.
- Length of credit history (15%) – The longer you use credit, the better.
- New credit inquiries (10%) – Applying for too many credit cards at once can lower your score.
- Credit mix (10%) – A combination of credit cards, loans, and other credit types helps.
A score above 650 is considered good, and 700+ is excellent.
2. Get a Student Credit Card
As an international student with no U.S. credit history, your best options are:
- Student credit cards (e.g., Discover It Student, Capital One Journey).
Use your card for small purchases and always pay it off in full to avoid interest charges.
3. Always Pay Your Bills on Time
Late payments negatively impact your score. Even one missed payment can lower it significantly.
- Set up automatic payments for at least the minimum amount due.
- If you can’t pay the full balance, pay at least the minimum to avoid penalties.
- On-time payments build a strong credit history over time.
4. Keep Your Credit Utilization Low
Credit utilization is the percentage of your credit limit that you’re using.
- Keep it below 30% for a good score (e.g., if your limit is $1,000, keep spending under $300).
- For the best scores, aim for below 10% utilization.
- If needed, make multiple payments per month to keep balances low.
5. Avoid Applying for Too Many Credit Cards at Once
Each time you apply for a credit card, the bank performs a hard inquiry, which can temporarily lower your score.
- Only apply for one or two cards when starting.
- Wait 6-12 months before applying for another card.
- Too many applications in a short time can make lenders think you’re desperate for credit.