Credit Reports & Ratings Articles


Using Credit Cards to Improve Your Credit Score

The manner in which we use our credit cards can either make us or break us. Responsible use will open the doors to even better financial opportunities in the future, while poor use of our credit cards will have those very same doors slamming closed in our faces. This is especially important for anyone who has big plans such as buying a home, financing a new vehicle, or starting a small business opportunity.



As anyone with good credit knows, it enables you to obtain the best personal loans, mortgages, and credit card opportunities. The interest rates attached to these financial vehicles are reasonable and the repayment terms are ideal. Alternatively, individuals with bad credit ratings have a more difficult time obtaining funds to borrow or credit cards to use.

Avoid Using Credit Cards in a Way that Decreases Your Credit Score

Unfortunately, credit cards do not come with a usage manual that describes how to use them wisely. This is something that consumers must learn for themselves. All too often, consumers just whip out a credit card without even contemplating how much is already charged on it, how much of a balance they are still carrying, or how high the interest rate they are being charged to carry the debt actually is.

The worst possible use of a credit card involves maxing out the credit limit, paying the monthly bill late, and failing to pay the bill at all during certain times of the year. This type of behavior leads to excessively high credit card debt.

Putting a budget into place or limiting the number of credit cards one has is also something left for the neighbors to do. After all, if the credit card companies are offering you new opportunities to spend money, you must be in a position to do so, right? Wrong. Just because someone gives you the okay to spend money doesn't mean that it is a wise idea to do so. No one knows your financial situation better than you do. If you already owe large sums of money that prevent you from paying nay of your bills in full, perhaps it is time to rethink your spending strategies.

Using Credit Cards to Improve Your Credit Score Use your credit card wisely and it will lead you to good things in the future including lower interest rates, higher limits, and more reasonable repayment terms. Avoid overspending and impulse buys since both of these can lead to more debt than you can afford to pay off. Stay within a predetermined level of spending to ensure that you can pay all of your bills on time with at least the minimum amount due. Avoid obtaining new credit cards since this will only increase your urge to spend.

If you want to improve your credit score, use your card sparingly. Always pay the bill in time to meet the due date. Try to pay more than the minimum amount due. Avoid cash advances using your credit card since this too can lead to too much debt. The best strategy is to use your credit cards for essentials and to spend only what you can afford to pay back in full when the bill arrives. This behavior should enable you to improve your credit score and improve your chances of obtaining additional finance.