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Building a Strong Credit Report from the Beginning

Written by Diane Moogalian on February 20, 2012 in Credit  |   17 comments

Sometimes a lower credit score is expected depending on your stage in life or credit usage. If you’re young, or if you are just starting out in your financial life, you probably don’t have a very high score yet. Similarly, if you have a thin…

Sometimes a lower credit score is expected depending on your stage in life or credit usage. If you’re young, or if you are just starting out in your financial life, you probably don’t have a very high score yet. Similarly, if you have a thin credit file or don’t have an extensive credit history with which to fill out your credit report, your credit score is also probably going to be lower than that of people with 20 years of credit history behind them.

If you fall into any of the above categories, you’ll need to prove your creditworthiness and improve your credit score by taking several important steps, including building your credit history and establishing good behaviors.

Components of your credit report

The same categories of information are in everyone’s credit report:

  • Identifying information. This includes your name, address, Social Security number, date of birth, and employment information. This information is not used in scoring, and updates to it are typically received when you apply for credit or benefits.
  • Trade lines. These are your credit accounts. Creditors report information on accounts you have established with them, such as the type of account (bankcard, auto loan, mortgage, and so on), the date you opened the account, your credit limit or loan amount, the account balance, and your payment history.
  • Inquiry information. This part of your credit report shows the companies that have requested and/or viewed your information. Typically this covers the last two years.
  • Public record and/or collection information. Here, you will find details about judgments, tax liens, or bankruptcies. Your credit file may also contain collection account information for debts that have been turned over to an outside collection agency.

How to establish good credit behaviors

Lenders will look to your credit file to determine the answers to the following questions:

  • What kind of accounts do you have open?
  • Do you make payments on time?
  • Do you have available credit?
  • What kind of a borrower are you?

If you have a thin credit file, lenders won’t find the answers they need—and they’ll look at you as a higher risk. However, as you open accounts, move or relocate, take out loans, open utility accounts, pay off debt, and move around in the financial world, your credit file will get thicker. Your credit history will soon start to reflect who you are in the financial world.

Once you establish good behaviors, such as paying on time and staying well below your available credit limit, your credit score will likely improve. The formula is different for every borrower, but good behaviors like these will be reflected in your credit score over time. Lenders can then look at your score and get a better idea of what kind of borrower you will be.

If you’re starting out in your financial life or if you need to straighten out your finances, see some of our other resources to help improve your creditworthiness and get on track with good financial habits.


Diane Moogalian is vice president of operations for Equifax Personal Information Solutions. Prior to joining Equifax in 2007, Diane held several strategic roles with leading financial services companies.

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.


  1. Nasrat George Mansoor says:

    I like to ask you, ” Do you answer some financial transactions? Like applying for a reverse mortgage, Refinance, and your suggestions.
    If yo can help, I appreciate your concern.

    Thank you,
    My best regards,

    Sincerely, yours

    Nasrat George Mansoor

  2. Barry Clayton says:

    I feel like I’m in a catch 22 situation. I have a 1st Mortage paying P&I, and and HELOC that I maxed out and only paying interest. Paying the first and the second as it is now is all we can afford on a monthly basis. Now, that the mortgage rates have gone down, I could theoretically refinance 1 point lower, combining both my 1st and 2nd mortgages and still pay what I’m paying now.
    But, it seems my barrier is my FICO score being 14 points away from 700 (the magical score to get a good rate). After several reviews of my credit report, it has been suggested that my problem is the HELOC being maxed out increasing my utilization score. This will not go away since I can only afford to pay the interest on this loan. It was also suggested to maybe increase my HELOC limit so I have more of a cushion. But, I don’t want to do this unless it for sure insure me the result I’m looking for. I would really like to know from an expert how to get my score up, and if what was suggested is a good idea. I hope you can see my catch 22 situation. I want to pay it off, but I can’t get a good rate to do so. Thanks

    • Diane Moogalian says:

      @Barry: While improving your score is definitely possible, there are no guarantees. Scores can change gradually over time as your overall credit picture changes. What I can tell you is that focusing on positive behaviors such as paying bills on time, not opening lots of new credit and overall managing credit responsibly to name afew, will aid in improving your score over time. See our other blogs for more information about improving your credit score: http://blog.equifax.com/credit/improve-your-credit-score-and-creditworthiness/

    • Ralph L King, Loan Officer, Embrace Home Loans. says:

      Barry, saw your posting,concern and objective. Raising your score to take advantage of the cuurent low market rates may NOT be necessary. I work with purchase & refinancing and can be reached at ralphk.embracehomeloans.com to discuss your confidential needs.

  3. Thank you, KDC says:

    I recently disputes some negative information on my experian credit report. It was deleted. Will it also delete from my other credit reports or will I have to dispute each one?

  4. Diane Moogalian says:

    @KDC: You will have to contact each Credit Reporting Agency to dispute and remove information. You can dispute with Equifax online here: https://www.ai.equifax.com/CreditInvestigation/

  5. Jennifer Brown says:

    Does it hurt my credit to have open credit cards that I no longer use?

    • EFX Finance Blog Editor, JF says:

      @Jennifer – Thanks for much for reading. Every person’s credit file is different, and we can’t say for sure what effect open credit accounts will have on your credit score. However, having more open available credit is beneficial to your score. It’s usually better to keep those accounts that you don’t use open, rather than closing the accounts and reducing your available credit. Just make sure you’ve paid off your balance and the account is still being reported as paid as agreed. You can find more information about closing accounts here: http://blog.equifax.com/credit/credit-score-changes-how-does-closing-an-account-affect-my-credit-score/.

      Thanks again for reading and look forward to seeing you on the blog again soon.

  6. ncollege4law@aol.com mark says:

    I have a $30,000.00 student loan that doesn’t come due until after I graduate in 2015, but yet it shows up now on my credit report and it’s killing everything on my report. I am on disabiity making $14,000 a year, so my debt to income ratio is like 110%. There seems to need to be a different location for loans that are not coming due for 3 years instead of them showing up now and putting my score around 536.

  7. Anonymous says:

    I started with a score of 680, no mortgage, car payment and only one cc. I have a negative collection account for 300.00 on there that does not belong to me (disputed with no result) and an IRS lien paid in full over 5 years ago. Which was not my fault. I had to hire an attorney to fix this and they still did not refund all of the funds they owe me!
    Well, I went to apply for a mortgage and they said I need more trade lines, etc.
    Got my mortgage, bought a new car with payments and opened a couple new cc’s with low limits. Charged them and am in the process of paying them off. I have been paying on my new mortgage now for 11 months. No lates on anything! The problem is that my score is 570! How has any of the positive things you do help? It looks like all they did were make matters worse! Any ideas? BTW, I do enjoy my brand new home!
    Joe Bronson

  8. NB says:

    Hello, Recently, a credit card I’ve had for a long time put a fraud alert on my account – I called in and verified all charges and they still want me to get a new card (which is a huge pain due to auto payments I have set up) and they won’t tell me any details, so out of principle I’m thinking about not getting a new card with them and going elsewhere…

    I didn’t close the account, and they haven’t closed it either, they just have a hold on the account and they want to send me a new one. If I don’t have them send me a new card and leave the account in it’s current status (with the balance paid of course) do you think this will harm my credit?

    Thanks for any guidance you can provide!

    • EFX Moderator, EM says:

      NB, Keeping the account open will continue your length of credit history. While the balance is currently zero, you mentioned you have bills currently being paid by that account. You’ll want to make sure no unexpected charges are made to the account. Are there annual fees? Do you have a bill auto-charging the account every month or every year? Keeping an account open can also be useful in emergencies. After lengthy inactivity, the lender could close the account too. You’d want to check with them on their policies for that as it can vary.

      So, there’s a lot to consider. Let us know what path you end up taking.

  9. rarwilliamson says:

    I find the whole credit rating business to be incredibly stupid! I am now retired, but held the same job at the same teaching institution for 44 years. I have lived in the same house, purchased for cash in 1957, and have had no debt of any other kind. No car debt, no college debt, no unpaid medical bills. My one credit card has been punctiliously paid every month. I monitor my Equifax report regularly and have my account “locked”. Result? My credit number goes down every year! Now, compare this with my daughter who has a mortgage, has recently changed jobs due to the recession, has car payments every month, and a child ready for college. Result? Her credit score keeps going up and currently is higher than mine! How can this be justified?

  10. Alan says:

    Hi Diane – I need your help.

    I have an active credit card with Cabela’s and recently requested a lower interest rate on my card. They sent me a denial letter which actually states the following:

    I am “Seriously Delinquent” and therefore not eligible for a lower interest rate – please call Equifax for more information on my credit report.

    I’ve pulled my Equifax Credit Report and found No Delinquencies on my report. I called Equifax and spoke with Troy head of Consumer Affairs. After he reviewed my credit report – he also agreed he cannot see any delinquencies on my report and does not know why Cabela’s is claiming this.

    I called Cabela’s back and after many transfers I found spoke to someone in the finance dept. who told me from the Soft Credit check they do in my be-half – Equifax sent them the Top 4 Factor codes which each translate into an English word.

    She told me the Factor 39 was the factor that translates into a “Serious delinquent” statement.

    Can someone at Equifax help me on where this factor rating of 39 is coming from. I don’t see anything like that on my credit report.

    If I can’t see it on my credit report where is this factor coming from.

    Thank you,

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