Can you explain why these items are considered negatives on my credit report?
Creditworthiness is proven over time. The longer your track record of making payments on time, the more probable you will stick to credit agreements in future (or so the reasoning goes). Conversely, someone who has only just started applying for credit could be someone whose finances were previously stable but have now started to get into difficulty. Obviously this is not necessarily the case but it is one possible inference. This inference is strengthened when same person applies for further credit in a short space of time.  Ultimately, what is considered positive is a stable credit record over a reasonable period of time, because it indicates you stick to payment schedules and don't suddenly need credit due to money problems. Credit card accounts are considered a good indicator of credit status because they imply what kind of borrower you are. Whereas many credit arrangements present a straightforward case of arrears / no arrears (e.g. think of a mobile phone account – either you pay your bill or you don't), with credit cards there is an element of flexibility in how much you borrow, and how much of that you repay. If you run up four figure monthly balances but clear them in full each month without fail, that is a good sign. If your average balance is increasing and you are paying on time but just the minimum amount, that is a potential flag. In other words, credit cards are of particular interest because they paint a more nuanced picture. Provided you use one responsibly, getting and using a credit card may improve your status with credit reference agencies. Consider that however high your credit score gets, there is a 'worst piece of it'. The automated software will always report your 'weakest' two points, even if they are already at the top 0.0001% of everyone; that's just how it is coded. I'm going to give the succinct, plain language version of the answers:  1.    Your oldest active credit agreement is not very old You don't have much experience or history for me to base my analysis on -- how do I know I can trust you to pay back the money? 2.    You have no active credit card accounts Other people haven't trusted you with credit or you haven't trusted yourself with credit and there's no active good behavior of paying credit cards on time -- you want me to be the first one to go out on a limb and loan you money? How do I know I can trust you to pay back the money? "1. Your oldest active credit agreement is not very old This is fairly straight forward. If you've not been exposed to borrowing for a reasonable length of time, people won't want to lend you money. They have no reason to have any confidence in your ability to repay them. As other said, it's pretty much a case of proving yourself by being good with credit over a period of time. 2. You have no active credit card accounts Credit reference agencies have to consider a variety of factors for a variety of purposes. Notably, they will be used for credit cards, unsecured loans, mortgages, and secured loans such as vehicle finance applications. These all have varying types of customer, and some will be inherently more risky than others. For instance, someone with a mortgage on a home is far more likely to make payments because they would be homeless without, however someone with a finance agreement on a car is relatively less likely to make those payments because all they stand to lose is their car. Consider that the most fruitful information the lender will get is a score and some breakdown of how it's generated, it's a very general understanding of your history. For that reason, having a wide variety of credit is very important. A good variety of credit to have would be one secured loan (e.g car finance) to get started, as well as at least one revolving unsecured credit account (e.g a credit card), and later on in your ""credit life"" an unsecured fixed term loan (e.g a loan for something which has nothing secured against it). I say the above reluctantly, because that's how I increased my credit score from 450 to 999 - first step was the car finance where in 3 months or so I changed from 450 to around 600, with a credit card I was approaching 900, and once I had an unsecured loan for 8 months I hit 999 - now I have all of the above plus a competitive mortgage and remain at 999. Whether each is mandatory to maintain 999 is debatable but based on personal experience, it seems reasonable."
Several factors are considered in loans as significant as a home mortgage.  I believe the most major factors are 1) Credit report, 2) Income, and 3) Employment status If you borrow jointly, all joint factors are included, not just the favorable ones.  Some wrinkles this can cause may include: Credit Report - The second person on the loan may have poor credit or no credit.  This can/will hurt your rate or even prevent them from being listed on the loan at all, which will also mean you can't include their income. In addition, there are future consequences: that any late payments, default, foreclosure, etc. will be listed on all borrower's reports. If you both have solid work history, great credit, and want to jointly own the home, then there shouldn't be any negatives.  If this is not the case, compare both cases (fully, not just rates, as some agents could sneakily say you can get the same rate either way but then not tell you closing costs in one scenario are higher), and pick the one that is best overall. This is just information from my recollection so make sure to verify and ask plenty of questions, don't go forward on assumptions. I came to US as an international student several years ago, and I have also experienced the same situation like most of the international students in finding ways to build credit history. Below I list out some possible approaches you may want to consider: I. Get a student job at campus (recommended) I think the best way is to get a student job in university, say a teaching assistant or student helper. In this case, you can be provided with a social security number and start to build your own credit history. II. Get credit card You can also consider to apply for a credit card. There are indeed some financial institutions that can provide credit cards for international students with no or limited credit scores requirement, say Discover and Bank of America. However, it is relatively hard to get approved, simply because hey may put more restriction in other aspects. For example, you may be required to keep sufficient bank balance above several thousand dollars during a period of time, or you should prove that you have relatives with citizenship in US who can provide your financial aid if needed. III. Apply for a loan (recommended) Getting a loan product is another alternative to get out of this difficult situation, but most of people don’t realize that. There are some FinTech start-ups in United States that specifically focus on international students’ loan financing. One representative example is Westbon (Westbon ), an online lending company that specializes in providing car loan for international students with no SSN or credit history. I once used their loan product to finance a Honda Accord, and Westbon reported my loan transaction records to US credit bureau during my repayment process. Later when I officially got my SSN number, I found my credit history has been automatically synchronized and I don’t have to start from all over again. It never be an easy journey for international students to build credit history in United States. What approach you should make really depends on you own situation. I hope the information above can be useful and good luck for your credit journey! "The fact that you pay the bill reliably is going to count more for your credit rating than anything else, even if you are paying it off in full every month. Lenders seem to like to see at least one instance where you charged a large balance, held it a couple months, then paid it off in full... but I wouldn't go out of my way to do that. Remember that the credit card company is making money on transaction fees as well as interest. If you're pushing money through their system, they're happy. They'd be happier if you were paying them interest too -- reportedly, they actually refer to those of us who pay in full every month as ""deadbeats"" -- but they aren't going to kick you out or ding your credit rating for it. The quote you give says that a small balance ""may be slightly better"". I submit that ""may be slightly"" is too small a difference to be worth worrying about, unless you have reason to believe that your credit rating actively needs to be repaired. (And as noted in the comments, it's actually stated even less strongly than that!) Personal recommendation: You can get a free credit report each year from each of the ""big three"" credit rating agencies. Those reports usually include a brief explanation of what they think the most negative item on your record is. The phrasing of those explanations is often somewhat misleading, but I'd still suggest that you get these reports and see what they think would improve your rating. I'm willing to bet it won't be ""doesn't carry a high enough debt balance.""" No credit bureau wants incorrect data, for obvious reasons, but it happens. That's one reason why they let you get access to your credit score, to check it the data is correct and make the 'product' (data about you) better.   Nope, that's not why you can get free access to your credit report.  The Fair Credit Reporting Act (FCRA) is why.  FCRA requires any credit reporting agency to provide you a free report upon request every 12 months.  Prior to this law, credit agencies made you pay to see your report including if you wanted it to dispute errors.  They only care about the dollars they get from having this data. FCRA removed one of their revenue streams.  If free locking moves forward, that will remove another. So expect them to fight it. "A drop in credit score of 300 is pretty significant, right?  You describe the cause of this as ""unfortunate circumstances"".  Lets say you observe a mother giving a small child a ball to play with in the median of a busy interstate.  Once the inevitable happens, would you also describe that as ""unfortunate circumstances""?  Because really it is the same thing. You overextended yourself and did not consider risk in the decision to borrow money.  This may sound harsh, but you have proven that you cannot handle credit.  So your solution is to borrow more?  That makes no sense. The best thing you can do for your credit score is to reduce, then eliminate all debt." "Most directly and most likely, it can hurt your credit score if you miss payments, since it's being reported regardless of whether or not it benefits you. This is a risk for you but a benefit for landlords, since it gives renters more incentive to actually make on-time payments. Secondarily, there's a small risk that Credit Ladder or one of their partners makes a mistake and you have to spend some time correcting it. They do seem to have reputable partners, so it's likely that mistakes can be corrected, at the cost of wading through customer support. Finally, it's important to look at where they get their money.  Credit Ladder charges directly for premium memberships - it appears that those are basically a sort of group discount thing. None of the benefits seem super awesome, but the cost is low enough that I think it could be worth it for some people. So that's one way to make money. Risk here = this service doesn't make enough money and they might phase out the free tier. Now, source of money #2 - your information. According to this source, ""within the Privacy Policy, the company states that [they] may use the personal information collected about you to “provide third parties with statistical information about our users – but this information will not be used to identify any individual user.” It’s not clear if this is the intended monetization of the company, it is a consideration to the user that this information may be sold."" Risk here = they might get hacked or they might sell your 'non-identifying' information. There's no details as to whether or not they are actually doing this, but they have the right to do so. If they got even 10% of the renters in UK using their service, then this data would be quite valuable." "In the United States, the Fair Credit Reporting Act allows companies to buy your credit information for ""legitimate business needs."" The legitimate use of credit scores and credit reporting varies state to state, but like it or not, you can expect a lot more non-lending use of your credit information in the future. Companies and individuals use credit reports as an assessment of general behavior because, unfortunately, they work. You've seen the disclaimers about ""past performance…"", but unfortunately in this case… past performance really has been shown to be a pretty reliable indicator of future behavior. So…" I have a few debts in collection. I do not care, I make very good money now, but I prefer to spend it on nice cars instead. In US after 7 years they do not affect your credit score. On the contrary, if you pay them they can ding your credit. That's what Susie Orman show says as well -- there is absolutely no point paying a debt that is more than 7 years old.