A credit score is a three-digit number that reflects your creditworthiness, or how likely you are to repay borrowed money. In the United States, this score typically ranges from 300 to 850, and it’s calculated based on factors like payment history, the amount of debt you owe, length of credit history, types of credit, and recent credit inquiries.
Lenders, landlords, utility companies, and even some employers use your credit score to evaluate your financial reliability. Having a good credit score can make it easier to get approved for loans, rent a home, buy a car, or even secure better interest rates and job opportunities.
The concept of a credit score is not as widely used in the Philippines where cash transactions are more common and credit reporting systems are still developing.
There are credit bureaus in the country such as TransUnion and the Credit Information Corporation. Yet, many Filipinos are either unfamiliar with how credit scoring works or have limited access to formal credit. This makes building credit from scratch in the US a significant adjustment for many Filipino immigrants.
Practical purposes of a credit score
A credit score plays a key role in many everyday financial decisions. Here’s how it influences your day-to-day life:
Renting a home
Landlords often check your credit score to decide if you’re a reliable tenant. A higher score can improve your chances of getting approved for rental applications.
Buying a car or house
Whether you’re applying for a car loan or mortgage, lenders look at your credit score to determine if you qualify and what interest rate you’ll get.
Getting a credit card or loan
Your credit score influences the approval process, your credit limit, and the interest rates offered to you.
Utility services & mobile plans
Some utility companies and phone providers check your score before letting you sign up without a security deposit.
Job applications
Certain employers may review your credit report (not the score) as part of a background check, especially for roles that involve handling money or sensitive information.
Maintaining a good credit score helps you access better financial opportunities and saves you money in the long run through lower interest rates and more favorable terms.
How to build a credit score as a newcomer to the U.S.
If you’re new to the United States, you may not have any credit history yet. Here are some of the steps you can take the start building your credit score.
Apply for a secured credit card
A secured credit card is a beginner-friendly option that requires a refundable deposit (e.g., $200–$500). This deposit becomes your credit limit. It can be used for small purchases and the balance payable every month.
Use case: Maria, a newly arrived nurse in California, gets a secured credit card with a $300 deposit. She uses it to pay for groceries and gas, then pays it off in full each month. After six months, her bank upgrades her to a regular credit card, helping her improve her credit score.
Become an authorized user on a family member’s credit card
If you have a family member or close friend with good credit, ask them to add you as an authorized user on their credit card. Their good payment history will reflect on your credit report.
Use case: Alex, a Filipino IT worker in Texas, is added as an authorized user on his cousin’s credit card. After six months, his credit score jumps to 680, helping him get his own credit card.
Apply for a credit-builder loan
Some banks and credit unions offer credit-builder loans designed for people with no credit history. Instead of giving you the money upfront, the bank holds it in a savings account while you make monthly payments. Once you’ve fully paid, you get the money back, and your credit score improves.
Use case: Janine, a hotel worker in Florida, takes a $500 credit-builder loan. After making regular payments for a year, she builds a credit score of 700 and qualifies for a regular credit card.
Use rent and utility payments to build credit
Most landlords don’t report rent payments to credit bureaus, but you can use services like Experian Boost, Rental Kharma, or PayYourRent to make rent and utility payments count toward your credit score.
Use case: Roberto, a factory worker in Chicago, enrolls in Experian Boost and adds his phone and electricity bill payments. His credit score increases by 25 points in three months.
Open a US bank account and get a debit card
Having a bank account with a history of regular transactions (e.g., direct deposits, bill payments) can help when applying for credit. Some banks offer credit cards to long-term customers, even if they have no prior credit history.
Use case: Carla, a caregiver in New York, maintains a checking account for a year. Her bank pre-approves her for a low-limit credit card, allowing her to start building credit.
How to improve your credit score (for those already in the United States)
If you already have credit but want to increase your score, follow these tips:
Always pay your bills on time
Late payments can significantly hurt your score. Set up autopay for bills like rent, utilities, phone plans, and credit cards to avoid missing due dates.
Use reminders on your phone or set up automatic payments to stay on track and not forget the bill due dates.
Keep your credit utilization low (below 30%)
Credit utilization is the percentage of your available credit that you’re using. If your credit card limit is $1,000, try not to use more than $300 at a time.
For example, if you have a $500 credit limit, keeping your balance below $150 will help maintain a healthy credit score.
Don’t apply for too many credit cards at once
Every credit card application results in a hard inquiry, which can temporarily lower your score. Applying for multiple cards sends a signal that you might be struggling financially or are actively seeking credit. Thus, only apply for new credit card when necessary.
A good practice is to wait at least six months between credit card applications.
Increase your credit limit (but limit your spending)
If you have a good payment history, ask your bank to increase your credit limit. A higher limit improves your credit utilization ratio.
For example, if you have a $2,000 credit limit and usually spends $600 monthly (30% utilization). You can then request to increase the limit to $5,000 but continues spending only $600, reducing your utilization to 12%, which boosts your credit score.
Monitor any credit report errors
In some cases ther are erroneous entries such as unrecorded bill payments. Mistakes such as these on your credit report can lower your score. Check your report for free at Annual Credit Report.com and raise a dispute on any errors.
How long does it take to build good credit?
- 3-6 months – You can start seeing a score if you have active accounts.
- 6-12 months – You can achieve a fair credit score (580-669).
- 1-2 years – With responsible use, you can reach good (670-739) or very good (740-799).
- 5+ years – A long credit history with on-time payments can get you an excellent score (800+).
Building a good credit score in the U.S. takes time, discipline, and smart habits. Start as early as possible, since a longer credit history works in your favour. Practice fiscal discipline and always aim to pay your credit card balances in full to avoid costly interest charges and show lenders you’re responsible.
Most importantly, be patient—credit improvement doesn’t happen overnight, but consistent, on-time payments and responsible credit use will lead to strong, long-term results.