Many Americans know they need a good credit score, but building credit can seem very difficult
“To have a good credit score, you need to get access to credit. And in order to get access to credit, you need a credit score,” James Garvey, the co-founder and CEO of Self, a fintech startup, told Yahoo Finance Live recently. “For millions of Americans, people are stuck in a Catch-22.”About 16% of Americans have no credit score, and an even larger proportion have a low credit score. In total, about 108 million consumers have a low or no credit score.
That said, there are some simple steps you can take to get what's considered a “good” credit score of 670 or higher.First, focus on your payment history. Your record of making on-time payments makes up 35% of your credit score, so getting this right is key. It's important to pay your bills on time every month, Garvey said.
Second, build up emergency savings. That way, if you're faced with an unexpected event, you'll have a rainy day fund that you can dip into to help pay those expenses so that you don't fall behind on your regular bills.