Financial Wellness • Mercer County, WV • 2 / 4

Understanding and Building Your Credit • Mercer County, WV

Learn how credit scores work, how to check your report, and how to build or rebuild credit safely.

The Five Factors of Your Credit Score

• Payment History (35%): Do you pay on time? This is the biggest factor.
• Amounts Owed (30%): How much of your credit do you use? Try to use less than 30% of your credit limit.
• Length of History (15%): How long have you had credit? Older accounts are better.
• Credit Mix (10%): Do you have different types of credit like credit cards or a car loan? A mix is good.
• New Inquiries (10%): Did you recently apply for new credit? Too many applications hurt your score.
• There are soft and hard credit checks. A soft credit check does not impact your credit score. You can always ask if a credit check will be a soft or a hard check.

• Go to AnnualCreditReport.com and request your free credit report from all three bureaus: Equifax, Experian, and TransUnion.
• You get one free report every year. Check it for errors.

• Get a credit card: Get a credit card with no fees to start. Use it regularly, but do not use more than 30% of your credit line.
◦ If you are approved for $2,000, do not put more than $600 in costs per month. Pay the card in full each month.
• Authorized user: Ask a trusted family member with good credit to add you to their credit card account.
◦ Their good payment history helps you. You do not have to charge anything on this card for it to help you.
• Credit-builder loan: Borrow $500-$1,000 from a credit union. It goes into savings while you make payments. This builds your payment history.

• Go to AnnualCreditReport.com and request your free credit report. Read it. Do you see any errors? If you do, you can dispute them with the credit bureau.