How to build credit with a credit card?

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    KikoffKikoff
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    #994
    KikoffKikoff
    Keymaster

    Assuming you already have a credit card, there are a couple of basic things you can do to start building your credit.

    Stay on top of your credit utilization ratio

    Being responsible with the credit you use is the most important place to start. Keep an eye on your credit utilization ratio and try to keep it around 10%. Your credit line might not be very high at first, with a limit of perhaps $500 or $1,000. So, if you can avoid making big purchases with your credit card that you can’t pay off right away, you should.

    Enroll in autopay

    Most, if not all, credit cards give you the option to enroll in automatic payments. Late payments can hurt you by adding interest to your monthly credit card bill, or by dinging your credit if the late payments are included on your credit report. Payment history is one of the biggest factors in your credit, so making payments on time, ideally in full, is important as you build credit. Keeping your credit utilization low will also make autopay easier to stick to since you hopefully won’t have to worry about automatic payments overdrawing your checking account each month.

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