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How to build credit or improve a credit score

Zero credit or bad credit isn’t an insurmountable hurdle. Here’s what to do.


How to Build a Credit History

No credit or bad credit? You’re not alone. Here’s what you need to know and how to fix it.

A credit background

What is a credit score?

The likelihood you’ll pay back credit

Credit score range (FICO)

300–850

1 in 10

Americans who have no credit

1/3

Americans who have bad credit

1%

Consumers with FICO rating <499 (considered bad credit)

Why no credit or bad credit?

Why don’t you have a credit score?

  • No credit use in 24 months
  • Recent credit application
  • Never listed on a credit account
  • Too young to have credit

Why do you have a bad credit score?

  • Late or no payments
  • Collections, loan defaults, foreclosure or bankruptcy
  • Maxed-out or high balances
  • Lots of credit applications

Better credit

  • Easier time qualifying for credit and rentals
  • Lower loan and credit card rates
  • Higher credit rates

What you can do to …

Build a credit history

  • Pay bills on time and in full
  • Ask someone to co-sign a loan
  • Get a secured credit card
  • Qualify for a credit-builder loan

Improve your credit

  • Pay bills on time and in full
  • Pay off any debt or existing credit cards
  • Skip new credit applications
Return to the original article How to build credit or improve a credit score

State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates) is not responsible for, and does not endorse or approve, either implicitly or explicitly, any third party products or the content of any third party sites referenced in this material. State Farm has no discretion to alter, update, or control the content on the third party sites. Any references to such sites are provided for informational purposes only and are not a solicitation to buy or sell any of the products which may be referenced on such third party sites. State Farm does not warrant the merchantability, fitness, or quality of the third party products referenced in this material.

The information in this article was obtained from various sources not associated with State Farm®. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. These suggestions are not a complete list of every loss control measure. The information is not intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. Nor is it intended to effect coverage under our policy. State Farm makes no guarantees of results from use of this information.


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