Thrifty Under Thirty: What Is A Credit Score, and How to Build It?

Sofia Weingarten |

Thrifty Under Thirty: An Introduction

Introducing Thrifty Under Thirty, a new blog series through Weingarten Associates about intelligent finances for young adults. I am a current young adult, a 21-year-old graduate student who has taken a personal interest in my finances. I have learned a lot, and I am continuing to learn, but I wanted to share with my fellow peers what I have learned. 

Thrifty Under Thirty: What Is A Credit Score, and How to Build It?

Credit is a loan from a lender, such as a bank, to a consumer, such as you! Credit comes in many forms of loans such as loans for credit cards, mortgages, and car payments; sometimes even landlords need a credit score to rent to someone. A high credit score allows individuals to receive bigger loans for bigger purchases and shows lenders that you are trustworthy with money.

Credit scores are on a scale up to 850, with 850 being perfect. However, generally, a score above 670 is good, a score above 740 is very good, and a score above 800 is excellent.

So what makes up a credit score? Payment history, amounts owed, length of credit history, credit mix, and recent inquiries make up a credit score, and each of the 5 aspects has a different weight.

  1. Payment History makes up 35% of your credit score. Payment history looks at if you are paying your credit off on time, and in full. The best way to do this is to set up a monthly auto-pay to pay off your credit in full, especially if you’re too busy to remember.

  2. Amounts Owed makes up 30% of your credit score. Amounts owed, or revolving utilization, measures how much of your credit you are using. If you are using a higher percentage of your credit line, lenders consider you riskier. It is recommended to keep the amount owed below 30%, but as low as possible is best.

  3. Length of Credit History makes up 15% of your credit score. Lenders consider you more trustworthy if you have had a credit line for a very long time. That is why now is the time to get a credit card and build credit! Starting young will help create a trustworthy history for lenders.

  4. Credit Mix makes up 10% of your credit score. This means that a wide variety of credit such as a loan on a credit card, and a loan on a car payment makes up this portion. It only contributes 10% to your credit score, so it has a smaller effect on it.

  5. Recent Inquiries make up 10% of your credit score. Recent inquiries are “hard pulls” that lenders do on your credit profile. Every time you apply for a new credit card, a hard pull is taken - try to avoid opening several credit cards at once to keep this in good shape! Inquiries can also happen when you apply for a loan, such as for a car payment or mortgage, or even when applying to rent an apartment.


To summarize each of these sections, to build a high credit score it’s best to responsibly open a credit card young, only use a small percentage, and pay it off on time, and in full.