If you’re Brazilian and living in the United States, you’ve probably heard the term credit score more than once.
Whether you’re applying for a credit card, financing a car, buying a home, or renting an apartment, your credit history can play an important role in your financial life.
But what exactly is a credit score? Why does it matter so much in the U.S.? And what can you do to improve yours?
Let’s break it down.
What Is a Credit Score?
A credit score is a number that helps lenders evaluate how likely you are to repay borrowed money.
In the United States, many commonly used credit scoring models, including FICO, use a range from 300 to 850.
Generally, a higher score indicates lower credit risk, although each lender may have its own approval requirements.
Credit scores are calculated using information from your credit reports, which may include your credit cards, loans, payment history, outstanding balances, and other credit-related activity.
Unlike your salary, which shows how much money you earn, your credit score primarily reflects how you’ve managed credit over time.
Why Is Your Credit Score Important?
Having a strong credit score can make certain financial decisions easier and potentially less expensive.
Here are some situations where it may matter.
Applying for a Credit Card
Banks and credit card issuers may review your credit history when deciding whether to approve your application.
Your credit profile can also influence your available credit limit and the terms you’re offered.
Financing a Car
If you plan to purchase a vehicle using an auto loan, your credit score may affect your eligibility and interest rate.
A lower interest rate can make a meaningful difference in the total amount you pay over the life of the loan.
Buying a Home
Mortgage lenders evaluate several financial factors, including income, debt, and credit history.
A stronger credit profile may help you qualify for more favorable mortgage terms, depending on the lender and loan program.
Renting an Apartment
Some landlords and property management companies review applicants’ credit reports as part of the rental screening process.
Your credit history may help them evaluate your financial reliability.
What Factors Affect Your Credit Score?
Although different scoring models use different calculations, FICO identifies five major categories that influence its commonly used scores.
1. Payment History — 35%
Your payment history is one of the most important factors.
Making credit card and loan payments on time helps establish a positive track record.
Late or missed payments can negatively affect your score, especially when they are reported to credit bureaus.
Tip: Set up automatic payments or reminders so you don’t accidentally miss a due date.
2. Amounts Owed — 30%
This category considers your debt levels, including how much of your available revolving credit you’re using.
For example, if your credit card has a $2,000 limit and your reported balance is $1,000, your credit utilization is 50%.
High utilization can negatively affect your score.
Keeping balances low compared with your available credit may help strengthen your credit profile.
3. Length of Credit History — 15%
The length of time you’ve had credit accounts also matters.
A longer history of responsibly managing credit can be beneficial.
If you’re relatively new to the United States, you may need time to establish a credit history.
That’s normal, and consistent financial habits can help you build one.
4. New Credit — 10%
Applying for multiple credit accounts within a short period can affect your credit score.
Some applications involve a hard inquiry, which may temporarily lower your score.
It’s generally better to apply for credit when you have a genuine need rather than opening accounts unnecessarily.
5. Credit Mix — 10%
Credit mix refers to the different types of credit accounts you manage, such as credit cards, auto loans, and mortgages.
A history of responsibly managing different credit types can contribute positively to your score.
However, you don’t need to take out loans simply to improve your credit mix.
5 Practical Ways to Build Better Credit
Improving your credit score usually takes time. There are no guaranteed shortcuts, but certain habits can help.
1. Pay your bills on time. Focus especially on credit accounts that report payment activity to credit bureaus.
2. Keep credit card balances manageable. Avoid regularly using most of your available credit.
3. Avoid unnecessary credit applications. Apply for new accounts thoughtfully.
4. Review your credit reports. Check for incorrect information that could affect your credit history.
5. Be consistent. Responsible credit habits over time are more valuable than trying to improve your score overnight.
How Can You Check Your Credit Report?
In the United States, the three major credit reporting agencies are:
- Equifax
- Experian
- TransUnion
You can access your free credit reports through AnnualCreditReport.com, the federally authorized website.
Reviewing your reports can help you identify inaccurate information, unfamiliar accounts, or potential signs of identity theft.
Keep in mind that your credit report and credit score are not the same thing. A credit report contains your credit history, while a credit score is calculated from information in that history.
Building Your Financial Life in the U.S. Takes Time
For many Brazilians, moving to the United States means learning how a different financial system works.
From understanding credit scores to managing expenses and planning for the future, financial knowledge can help you make more confident decisions.
And when your financial life involves both the United States and Brazil, having reliable services and Portuguese-speaking support can make a difference.
For more than 25 years, Lyons Xpress has helped Brazilians stay connected across borders through international money transfer services between the U.S. and Brazil.
We understand that behind every financial decision are personal goals, family responsibilities, and plans for the future.
Lyons Xpress. From Brazilians, for Brazilians.
