which of the following is true of a person with a high credit score?

A credit report is your passport to all types of credit related products in the U.S. including credit cards, auto loans, mortgages, apartment rentals, etc.

If you are a foreign national in the U.S., first try to get an SSN as soon as possible. This will allow third parties to report and pull your credit. The following will be useful only if your credit is reported to one of the major credit bureaus - Experian, Transunion, Equifax.

The most important thing on a credit report is a credit score. To build a good credit score, it is important to understand different aspects of a credit score. There are 5 major components of a credit score.

  1. Payment History - Based on a borrower’s payment history. This is the most important factor. Making regular payments on previous credit is very important. Try not to be late on your credit card and other credit payments.
  2. Credit Utilization - Make sure you don’t max out credit cards. It is important to maintain a good utilization rate (< 30% of your credit limits).
  3. Length of Credit History - It is important to show that you can consistently use credit responsibly that’s why you length of your oldest credit account is also matters.
  4. Credit Mix - Having different accounts and types credit accounts can show that you can manage different types of debts.
  5. New Credit - Low number of recent credit inquiries are important to show that you are not looking for credit all the time.

Things like high of credit utilization, too many credit cards, late payments, and defaults will have a negative impact on your credit history. Some people have a misnomer that if they pay their credit cards in full, their credit history will be better than the ones who pay minimum balance. The truth is that it doesn’t matter if you pay your balance in full. Until you have negatives on your credit history, you are fine.

Also, credit score is not the only thing banks and lenders worry about, length of credit history is crucial. If you have a good credit score but a very short credit history, it won’t help you much. This is because credit scores start becoming accurate representation of risk after 6+ years of credit history.

There are a few ways you build history and get a good credit score:

  1. Apply for a secured credit card: If banks are not approving you for a card even with a smaller limit, get a secured credit card. These are credit cards that are backed with a cash deposit from you. The credit limit is equal to the amount deposited. People usually get a $1000-$3000 limit card to start with. After 6 months - 12 months, you can convert your secured card to an unsecured card. This will help you get on the right path to build a credit history.
  2. Apply for a credit builder loan: There are several companies that can give you a small loan to help you get on the grid of U.S. credit system. They may ask you to provide the deposit which they will lend to you but the good thing is that they will report it to the bureaus. This will get you started with a credit history.
  3. Get a co-signer: If you have family, relatives or close friends who can act as a cosigner for your credit product, you can piggyback on their credit history to get started. Remember that they will be liable to pay for your defaults, so make sure they know this and are comfortable with cosigning.
  4. Become an authorized user on someone else’s credit card: Another option is to become a user on a credit card of your family member or a relative. You will get all the benefits of a credit card and start building credit history but not be obligated to pay for charges.

Doing the above will help you build a credit history.

FAQ + discussion: GETTING, KEEPING high credit / FICO scores. Glossary, data points, utilization, etc. Updated 7/23/06

Which of the following is true of a person with a high credit score?

Which of the following is true of a person with a high credit score?


A. The Importance of "Adequate" Credit Scores

B. "Adequate" vs. "Super" Credit Scores

C. Why would a "Super" credit score be helpful?

A. Credit scoring models are intentionally ambiguous

B. Scoring model complexity prevents extrapolation

C. Scoring Depends on Reporting--which can vary considerably.

D. Scoring models and their key "inputs" are evolving significantly.

E. Scoring seems headed towards consolidation.

F. Scoring is always individual, not "joint".

A. Do not EVER pay late.

B. Keep your apparent credit "utilization" low.

C. Seek higher credit limits.

D. Keep your "credit quality" high.

E. Cultivate a long credit history and an old average account age.

F. Avoid excessive "hard inquiries".

G. Avoid frequently changing your "official residence".

A. Establish credit early.

B. Be choosy about the quality of your credit applications.

C. Use "authorized user" status strategically.


E. Time credit applications strategically.

F. Think through your "official" address.

B. Getting FICO, FAKO, Vantage, and other "scores"

C. Getting Access to your Report and Score


-be less likely to get offered a job;

-be unable to get many brokerage or bank accounts;

-pay more, perhaps much more, for insurance;



G. Avoid frequently changing your "official residence".




Appendix: A Credit Glossary

OP content edit history:

7/20/06 added table of contents, glossary, "related links" section

7/21/06 Added PM/email disclaimer, "seek to raise limits" rule, fixed WaMu credit score details (Thanks CreditGuy)

7/23/06 Updated "FEATURES OF CREDIT SCORING" section to include entries on "Scoring models and their key "inputs" are evolving", and "Scoring is always individual, not joint" per responder inquiries. Added link to the "higher credit limits" thread, and request that posts fitting better there be steered in that direction.

(This post and others written by its author are hereby licensed under a Creative Commons Attribution-ShareAlike 2.5 License subject to pertient enforceable provisions of the Fatwallet user agreement.)

Free credit scores provided by major credit cards:

Can you include a section on how to get your Credit Score (for free if possible) and the consequences of checking it, etc.

MiaFLSurf said: It would be nice jsut to see what Credit Cards, etc. I have on my credit report.

Will not get you your score but will show your history

That's why you should be suspicious of anyone claiming that "doing x will increase (or decrease) YOUR score by y points." There is NO WAY that they or ANYONE else could know that information.

D. Scoring seems headed towards (long overdue) consolidation.

MiaFLSurf said: I know growing up, I had a credit card backed by my parents, etc. and I want to see if those are long established lines of credit, and things of that nature.

You could tell by checking your report. You could even request that if it is NOT on your report, you have your parents call and request that the creditor report you as an AU. Asssuming their account is in good standing, this would help you, perhaps a lot. And while the creditor might not honor your request, it never hurts to ask. Edit for other questions: For those of us that applied for credit cards in college, etc. that did use our parent's residents when applying but now when in grad school, etc. have changed the address on that card to the appt/house that they will live in for about 4 years, is the address on the report still the one we used to sign up, or would it be wise to go back and change it back to the original address, our parents, that have been established for a lot longer?

If you've already changed the address once, I'd say leave well enough alone. This isn't a big deal in any case. Also: I wish I knew that keeping cards that arent being used was a good thing. I applied for a card last year and cancelled it months after. Would it be possible to call the company up and "re-open" the same account, or is it six feet under and I should just move on?

If it's within one year, I'd definitely call. You might even be able to "convert" it to something better after re-opening it, and keep the same history (and account number.) Would oepnningabout 3-4 cards be beneficial right now even if I dont use them?

That very much depends on your situation. But assuming that (a) your credit is spotless, just light, and (b) you won't have a need for a mortgage in the next 12 months, and (c) you have the time and interest to pick a handfull of carefully chosen cards, I think that grabbing a couple of good ones might serve you very well.

codename47, I'm sure several of us would like to hear more about your suing the CRCs. It probably warrants its own thread, but it would also be very on topic here if you'd like to elaborate.

babyblue007 said, "What's secure vs unsecure bank card?" I'll put that in the OP. What's the recommended way of dealing with cards you no longer use? Wouldn't it effect application for new cards?

Just make one small charge every year or two to keep them active, and otherwise ignore them. Would maximizing credit limit of all cards/bank be a good strategy for lowering the apparent utilization?

rtconner, it seems you were confused by my use of "primary residence", so I've tried to clarify. (Of course I'm not suggesting that someone not buy a new house to protect their score.)

dk240t and minghi, you raise good points..they mostly go to more specific strategies, so I'll try to bring them up in the second post. Feel free to remind me/bring them up again as appropriate.

Good point Nummerkins, let me know if you think more info on Section 5 would be helpful.

Thanks ksd, I've got your useful info in the OP. I also pulled the score for myself and pasted it as a bump to your thread.