Even so, the average FICO credit score in the U.S. was 714 as of 2022, according to data from Experian. Thats considered good based on FICOs credit score ranges.

But if your score is lower, dont stress. There are a few steps you can take to improve your credit scoreor even build one from scratch. Heres how.

Understanding your credit score and how it works

Your credit score is a numerical representation of your history with borrowing and repaying money. Its a three-digit number based on the information contained in your credit reports, which are maintained by the three main credit bureaus: Equifax, Experian, and TransUnion.

The most common scoring modelsFICO and VantageScoreboth range from 300 to 850. Experians senior director of consumer education and advocacy, Rod Griffin, compares a credit score to a grade received in school. Your credit score represents the quality of your credit history, like a grade represents the quality of the work you did, he explains. Like a grade on a paper, it helps lenders predict the likelihood that you will repay a loan as agreed. 

The higher your credit score, the more trustworthy you are in the eyes of lenders. A good score will give you higher approval odds when you apply for a loan or credit card, as well as the best interest rates and terms. On the other hand, a low credit score makes it harder to get approved for financing at affordable rates. It can also prevent you from getting approved for an apartment, utility account, cell phone plan, and more.

How your credit score is calculated

Credit scores are based on a number of factors, and the exact algorithms used by scoring agencies are largely proprietary. Still, we know that when it comes to FICO scores (the scoring model used most often by lenders) there are five general categories of metrics, according to John Ulzheimer, president of The Ulzheimer Group and founder of CreditExpertWitness.com.

In general, FICO scores are based on the following: 

1. Payment history (35%): This examines whether youre paying your bills on time, and is the most heavily weighted factor.
2. Amounts owed (30%): This is how much debt you owe in relation to the total amount of credit extended to you.
3. Credit history (15%): The length of time youve been using credit, as well as the average age of your accounts, make up your credit history.
4. Credit mix (10%): This considers the types of credit you have, including revolving credit (such as a credit card or home equity line of credit) and installment loans (such as an auto loan, student loan, mortgage, etc.)
5. New credit (10%): Finally, the amount of new applications and credit accounts you have on your credit reports will affect your score.

How to build your credit score

To build your credit score, you first need to establish your credit reports. 

Credit reports are created using data such as your personal information (name, address, Social Security number, employment history, and date of birth), your past and existing credit accounts, known as tradelines (credit cards, mortgages, car loans, and student loans), and public records (court rulings, owed property taxes, and bankruptcy filings). This information is collected independently by the three major credit bureaus, which then compile it into your credit reports. Note that because each bureau collects and reports data separately, there could be discrepancies between your reports.

According to Experian, youll need at least three to six months of credit activity on your reports before a credit score can be established. If youre not sure what you can do to create that activity, here are a few ideas.

1. Apply for a credit card

Griffin says it's good to have one or two credit cards to build your credit score, as revolving credit accounts tend to be weighted more heavily by credit scoring agencies.

Unlike an installment loanlike a car loanwhere you're told you're going to pay this amount on this day every month until it's paid off, with a credit card, you decide how much you're going to charge, and you decide how much you're going to repay each month, Griffin says. That free will, he adds, gives lenders more insight into how you will make borrowing and repayment decisions.

It is important to note that you often need good credit to get approved for a credit card. So if you dont have much of a credit history yet, or you cant get approved, you can opt for a secured card instead. These cards are designed for people with no credit or bad credit. You pay a small deposit upfront, which serves as your line of credit and collateral if you fail to make your monthly payments. You charge expenses to the card and pay off the balance, just as you would with a traditional credit card. That payment activity is then reported to the credit bureaus. After several months of using your card responsibly, you may even get upgraded to a regular credit card.

2. Get added as an authorized user

If you dont want to risk racking up debt with a credit card, you can consider being added as an authorized user on someone elses card instead. This allows you to benefit from the primary cardholders credit card activity (assuming they keep their balance low and make payments on time). As an authorized user, you dont have to actually use the card to benefit. Plus, you have no liability when it comes to making payments. 

3. Open a credit-builder loan

Credit-builder loans are also designed for borrowers with low or non-existent credit scores. Often found at credit unions, these loans allow you to borrow a small amount (usually, around $1,000) and then make payments toward the balance. However, instead of receiving the loan proceeds to spend as you like, theyre placed in a savings account and held there until the loan is paid off. Once the loan is repaid, you receive your money back, minus any fees. As long as you make your payments according to the agreement, that positive credit activity is reported to the credit bureaus. 

How to improve your credit score

Maybe you already have a credit score, but its not as high as youd like. Ulzheimer says there are two different approaches to improving your credit score, and both stem from different circumstances. 

If youre looking to improve your credit score from a lower range, that means you did something to bring it down that needs to be fixed. The path to a higher score depends on why your score is lower in the first place, Ulzheimer says. We don't all end up with lower scores for the same reason, and therefore, we don't all do the same things in order to rehab our scores.

If your credit score is lower because youve missed payments, for example, youll need to consistently pay your bills on time and in full to improve your score. If your credit score is lower because you maxed out a credit card, paying down that balance will help your score grow. 

If youre simply looking to improve or maintain a good credit score, its a matter of continuing to do what youve been doing. If you're doing all the right thingskeeping those balances low, paying in fullit gets really boring because all you have to do is the same thing over and over again, Griffin says. 

Whether you want to build up a bad score to good, or keep growing the great score you have, there are a few steps you can take to do it.

1. Check your credit reports for errors

Regularly checking your credit reports is key to making sure that your personal and account information are correct, as errors can bring down your score. You can request a free copy of your credit report from all three major credit bureaus at annualcreditreport.com. 

If you do find an inaccuracy, you can dispute the error with the bureau thats reporting it. Common errors to watch out for include having your name misspelled, an incorrect account status (like being reported as late or delinquent when its really in good standing), or the wrong outstanding balance.

2. Pay your bills on time

As the most heavily weighted credit score factor, paying your bills on time is critical to building a good credit score. According to data from FICO, missing just one payment can cause your score to drop as much as 180 points, depending on how late the payment is and the overall health of your credit. If you have a severely delinquent account that's been sent to collections, bringing that account current can drastically improve your score as well.

3. Keep your credit utilization low

The amount of credit you use in comparison to the total amount of credit extended to you is known as your credit utilization ratio. Since amounts owed accounts for 30% of your score, keeping your utilization low will go a long way toward benefiting your credit score. Thats especially true for revolving credit accounts, such as credit cards. 

For example, say you have a $5,000 credit limit on your credit card and carry a $2,500 balance. Thats a 50% credit utilization ratio, which isnt ideal. Paying your balance down to $500 would lower your utilization to 10%much better.

For an extra boost, you could consider asking your credit card issuer to increase your credit limit. Raising your credit limit while your balance remains the same translates into a reduced credit utilization ratio overall. Still, Griffin cautions against asking for an increaseit can make it easier to accumulate more debt or use the increased limit to get around paying down the balance. So only use this strategy if youre confident you can keep your debt levels low.

4. Limit new credit applications

Applying for new credit can negatively affect your credit score because it results in a hard credit inquiry. This means a lender pulled your credit report to review it while evaluating your application. One or two hard inquiries may cause your credit score to drop slightly, but many within a short period of time can cause more damage; its a red flag to lenders that you may be desperate to borrow money.

if you do apply for a credit card or loan and get rejected due to your credit, take a beat before reapplying. The lender is required to send you a letter explaining what factors, specifically, caused that rejection. You can then use that information to improve your credit score before applying again.

Keep in mind that opening too many new accounts can also negatively impact your credit score because it lowers the average age of your total accounts. So to preserve your credit score, limit new credit applications when possible. 

The takeaway 

Having a good credit score is important for many reasons. Good credit allows you to borrow money at affordable rates, and gives you greater financial opportunity in general, according to Griffin. It helps you access lower cost financial tools, [and] a strong credit history helps you break out of cycles of predatory lending, he says. Plus, it may be a deciding factor when applying to rent an apartment, open a utility account, and more. 

Using credit wisely, including paying your bills on time and keeping your overall debt to a minimum, are great ways to grow a strong credit score. But if you have limited experience using credit, there are several tools available to help you establish a score, too. Either way, its important to consistently work on building a good credit score and ensure it remains in good shape. 

It's about giving yourself a financial advantage, and using it to your gain, as opposed to seeing it as a barrier, Griffin says. So if you have a good credit report, good credit score, it's empowering.

Companies from Starbucks to Amazon have faced backlash from their employees after implementing rules that mean staff will have to spend the majority of their working weeks in the office, despite their CEOs insisting that collaborating with colleagues in person fosters creativity and a better working environment.

However, according to Scott Galloway, an NYU Stern marketing professor and host of The Prof G Pod podcast, resistance to a return to the office could be majorly holding workers back.

You should never be at home, he told an audience at the Wall Street Journals CEO Council Summit on Wednesday. Thats what I tell young people. Home is for seven hours of sleep and thats it. The amount of time you spend at home is inversely correlated to your success professionally and romantically. You need to be out of the house.

Galloway who is also the founder of a number of companies including brand consultancy Prophet and e-commerce firm Red Envelope also insisted that work-life balance is a myth, adding that success requires an effort level of 110%.

I dont remember my twenties and thirties, other than work. It cost me my hair. It cost me my first marriage. And it was worth it, he said. If you expect to be in the top 10% economically, much less the top 1%, buck up. Two decades plus, of nothing but work, thats my experience.

Many high-profile figures in the corporate world have suggested remote work could be damaging to peoples careers with some firms, like JPMorgan and Apple, warning those who dont comply with return-to-office orders could be penalized.

Rich Handler, CEO of investment bank Jefferies, argued in an Instagram post in June that those who show up to the office will also benefit by demonstrating their value to bosses who may one day be deciding who to lay off. He also insisted that working remotely could be the difference between having a job and forging a career.

The collaboration bias

Handler isnt alone in these assertions, with future-of-work experts touting the benefits of returning to the office for millennial and Gen Z workers.

Caitlin Duffy, director of research at Gartner HR, told Fortune in a call on Thursday that while there were clear benefits of remote work that could actually boost employees performance, a lot of leaders were concerned about its impact on collaboration, culture and social connections.

We do find that there is this bias toward assuming collaboration has to be in person, but not all collaboration does, she said. A lot of organizations found during the switch to remote work that a lot of things they thought had to be done in person can be done really well remotely. So, I think a lot of those concerns tend to be based on sometimes outdated assumptions about how work gets done and sometimes theres just a need to create new processes or norms that are suited to a hybrid or remote environment, rather than just going back to a fully on site one.

Meanwhile, Bryan Clayton, co-founder and CEO of GreenPal a digital platform that connects users across the U.S. with landscaping professionals said it was absolutely possible to have a successful career while working remotely.

As someone who has managed many remote teams, I have witnessed firsthand the tremendous potential and opportunities that remote work brings, he said. But its important to note that the success of a remote career depends on various factors, including effective communication, goal alignment, and strong performance management. Setting clear expectations, establishing regular check-ins, and fostering a culture of trust and accountability are essential for ensuring remote team members are well-supported and connected.

Deb Harrison, a consultant who has worked with more than 400 companies including McDonalds and Johnson & Johnson, also argued that remote work provides an incredible opportunity for a successful career.

The specific companies and industry, along with the skillset and personality type of the remote worker all contribute to the potential and what the career trajectory will look like, she said.

I have worked with numerous executives who worked frequently, if not predominantly, remotely and had done on their path to an executive role. Just as with career growth when not working remotely, working remotely and growing in your career takes diligence.

The Welsh soccer team has secured its latest celebrity linkup and Hollywood co-owner Ryan Reynolds is keeping it in the family.

The Deadpool stars wife, Blake Lively, will sponsor the teams training kit from next season through her non-alcoholic beverage company Betty Buzz.

Our team had, of course, heard of Wrexham AFC but once we officially learned about their refreshing vision, we knew it was the right official fit for our refreshing sparkling beverage, Lively said.

Wrexham has gained a global following since it was bought by Reynolds and fellow actor Rob McElhenney for $2.5 million in 2021.

A documentary series about the team has streamed around the world and has made household names of its players, management and fans.

Reynolds and McElhenny have used their own celebrity to raise the profile of the club, which spent 15 years out of the English Football League before earning promotion in dramatic fashion last month.

The growing exposure of Wrexham led to a shirt sponsorship deal with social media platform TikTok, while there has also been a link with Expedia.

Lively has attended games alongside her husband as Wrexham won the National League with a record total of 111 points. After reaching the fourth division of English soccer, Reynolds and McElhenney rewarded the team with a trip to Las Vegas.

A new 5,000-seat stand is being built to raise the capacity at the clubs Racecourse Ground to 15,000. The team is also touring America this summer, when it will play LA Galaxy II and Premier League teams Manchester United and Chelsea.