Building Credit Like a Boss 

Did you know your credit score can impact your life goals? From getting approved for your dream home or car to something as simple as setting up utilities in your first apartment—credit matters. Your credit score shows how trustworthy you are when it comes to handling money. 

A lot goes into building good credit, but don’t worry—we’re breaking it all down. You’ll learn how to build credit, what mistakes to avoid, and how to keep your score in tip-top shape! 

Understanding Credit: What Is a Credit Score? 

A credit score ranges from 300 to 850—the higher, the better. A strong score increases your chances of getting approved for loans, credit cards, and more. 

So, what affects your score? 

• (35%) Payment History – Paying your bills on time is essential. 

• (30%) Credit Use – Keeping your credit usage low will ensure steady growth. 

• (15%) Credit Age – The longer you have actively utilized credit, the better! 

• (10%) Inquiries & New Credit – Recently opened accounts and hard credit inquiries can negatively impact your score if done too often. 

• (10%) Credit Mix – A healthy variety of credit can positively impact your score. 

Your score is calculated by the three main credit bureaus: Experian, Equifax, and TransUnion. 

Credit Pulls and How They Affect Your Credit 

You may have heard that checking your credit can hurt your score—and that’s partially true. Some credit checks can negatively impact your score, but not all of them. These checks are known as credit pulls, inquiries, or credit checks, and they come in two types: hard pulls and soft pulls. 

Hard Pulls 

• A hard pull occurs when a lender or company checks your credit as part of a decision-making process. This type of inquiry can lower your credit score by a few points and requires your authorization. Common situations where a hard pull may happen include: 

• Applying for a loan or credit card 

• Renting an apartment or applying for a rental property 

• Setting up utility services 

• Opening a phone plan 

Soft Pulls 

• A soft pull does not impact your credit score and usually doesn’t require your consent, although the requester must have a valid reason. Soft inquiries typically include: 

• Checking your own credit report (on any of the three major credit bureau websites) 

• Background checks for employment 

• Pre-approval or pre-screening offers from credit card companies

Understanding the difference between these types of credit pulls can help you make informed decisions and protect your credit score. You may also check with a creditor if they need to conduct a hard pull or soft pull. If you know you will need your credit checked in a few times in the same timeframe making sure you can provide your own credit report or have the company do a soft credit pull can help maintain your credit score. 

 How to Build Credit from Scratch 

🔑 Pay Bills On Time (Every. Single. Time.) 

Your payment history makes up 35% of your credit score—so never skip a bill! Carrying a balance not only costs you interest, but it also hurts your score. 

👥 Become an Authorized User 

Join a trusted family member or spouse’s credit card as an authorized user. Just make sure they’re in good standing—and that you don’t hurt their score by missing payments. 

💸 Get a Credit-Builder Loan 

Don’t wait until you need credit to start building it. A credit-builder loan helps you establish history before you need it. You make regular payments, and once the loan is paid off, you get your money back—minus any fees and interest. 

💳 Use Credit (But Not Too Much) 

Start with one credit tool—a card or a loan. Using less than 30% of your credit limit (ideally under 10%) helps your score. If you open a card, pick one that fits your lifestyle and budget, like Honor’s Select Rewards Card for everyday spending. 

Power Moves to Boost Your Credit Score 

Already have credit and want to level up? Here’s how: 

⬆️ Request a Credit Limit Increase 

If you’ve been making on-time payments, your credit card issuer may increase your limit. This can improve your score as long as you don’t rack up new debt. 

🧐 Check Your Credit Report Regularly 

Review your credit reports for free at AnnualCreditReport.com or check your score through your Honor banking app. (Your score is updated quarterly). Look for errors on your report and dispute anything that’s incorrect. 

🧩 Diversify Your Credit Mix 

Mix it up! A store card, a car loan, and a credit card each show you can handle different types of credit. Just avoid stacking too many debts at once, especially on cards you’re still paying off. 

🕰️ Keep Old Accounts Open 

That old credit card you rarely use? Keep it open! Older accounts help your credit age, which boosts your score. Just use it occasionally so the issuer doesn’t close it for inactivity. 

 Common Credit Mistakes to Avoid 

❌ Missing Payments 

Even a single 30-day late payment can stay on your report for up to 7 years. If you miss payment, contact your lender ASAP. They may waive the fee and help you avoid damage to your score. 

❌ Applying for Too Many Cards at Once 

Every credit card application triggers a hard inquiry, which can ding your score temporarily. Limit new applications to avoid looking risky to lenders. 

😟How to Recover from Bad Credit 

Don’t Panic—You Can Rebuild! 

Start by paying down your debts and making payments on time. Consider transferring high-interest balances to a lower-rate card—just make sure the interest is lower on the new card. Learn more about how Honor can help you with a balance transfer today. 

 Final Words: Be Patient, Stay Consistent 

• Good credit takes time, this is a marathon, not a sprint. 

• Celebrate the little wins! 

• Check your credit score today and see where you stand. 

Need help leveling up your credit? Honor is here for you! 

📞 Call us at 800.442.2800 or visit your local branch to get started.