Credit Goals: Learn How to Build Credit with a Credit Card

Building your credit isn’t as hard as you might think, especially when you have a credit card! Learn how to build credit with a credit card here.

Around 68 million Americans have poor credit scores, while more than 45 million Americans have no credit score altogether.

It’s really important to make sure you build your credit score. Whether you’ve got a poor credit score or none at all, you could be significantly damaging your financial future.

When you rent an apartment or secure employment, your credit score could make the difference. But, there are ways to quickly and effectively improve your credit score.

Do you want to know more about how to build credit with a credit card? Check out and read below!

1. Pay Off Your Credit Card Bill on Time

Your credit score is concerned with your record managing debt. Lenders want to know your history of borrowing money and paying it back.

You need to demonstrate that you’re capable of borrowing money and repaying it on time. If you’ve never made repayments, you simply have no credit score.

If you already have payments coming out of your bank account, then you could just put these expenses on your credit card. This would allow you to establish credit without incurring debt.

You just need to pay off your credit card bill on time and in full. This way you also won’t have to pay any interest.

Around 35% of your credit score is determined by your payment history. So, this is an important way to build credit.

2. Use Your Credit Card Like a Debit Card

Your bank balance doesn’t change when you pay for stuff on your credit card. This way you can keep your earnings until you pay off your credit card bill.

If you don’t track your credit card spending, you can easily spend more than you can afford over the month.

Whether you have a credit card or not, you should keep to a budget. Then, you know how much you can spend each month.

You can overcome any financial problems by treating your credit card as though it is a debit card. Spend money within your means, then you’re not left with high interest.

3. Keep the Balance Low

Your credit score is also influenced by how much money you owe. If you’re borrowing high amounts of money, this affects your score.

In fact, around 30% of your overall credit rating is determined by this.

This isn’t just regarding the total amount you owe. But also, how much you owe as a percentage of your credit limit. This is known as your “credit utilization.”

Therefore, it’s important to keep your credit card balance low. You shouldn’t be regularly overshooting 30% of your total available credit.

Another tip is to pay off your credit card bill a couple of times per month rather than waiting until you receive your bill. This is particularly easy to do if you have online banking.

4. Keep Your Credit Card Account Active

Lenders want to see your credit history is extensive, regular and predictable. You borrow money and you quickly pay it off in full.

The longer the period of time you’ve been using your credit card in a responsible manner, the more evidence available to lenders.

The sign-up bonuses and rewards offered by credit cards are always tempting, you shouldn’t be opening up credit card accounts and closing them immediately after.

Once you’ve done your research and determined which credit card is right for you, open it and keep it going for a long time.

Every time you open or close a credit card, it shows up on your credit history. If you do this too regularly you could damage your score.

The length of time you’ve been managing credit is represented by around 15% of your credit score.

5. Consider Your Credit Card Options

If you have either poor or no credit score, you’re probably going to struggle to be accepted for the best offers. The credit card deals with the best benefits are usually only available to people with an excellent credit score.

However, there are credit cards which accept customers with either a poor credit card or no history of credit at all. For example, check out Bonsai Finance to learn more about a credit card for people with bad credit scores.

It’s also important to consider the different benefits which are offered, including the conditions, such as interest rates and credit limit on each credit card.

6. Avoid Random Credit Card Applications

You probably think that you can randomly apply for credit cards. Even if you’re not approved, it’s worth a try, right?

Well, each application for a credit card you make, it’s logged in your credit history. If you get rejected with your credit card application, this will show up negatively on your credit rating.

Keep applying for more and more credit cards, this signals to lenders that you’re in financial trouble. If you’re considering applying for a credit card, you can get your credit score tested before you send off your application.

7. Be Savvy with Your Credit Card

If you don’t have a credit score at all, credit cards can be an excellent way to build your credit score. If you’re not careful, it can also make your financial troubles even worse.

Unlike loans, you can build your credit score with a credit card without carrying any debt. However, if you’re already struggling with unpaid debts, then taking out a credit card is not the best option for you.

How to Build Credit With a Credit Card?

Whether you have a poor credit score or no credit history at all, now you know how to build credit with a credit card.

Just because using your credit card unwisely can seriously damage your credit score, it doesn’t mean you should avoid them altogether. You just need to use credit cards the right way.

Do you have debt and bad credit? Check out our blog for more financial advice here.