Home › Questions › Credit Building › how to use credit cards to build credit?
- This topic is empty.
-
AuthorPosts
-
October 3, 2024 at 5:25 pm #1050
Kikoff
KeymasterOctober 3, 2024 at 5:38 pm #1065Kikoff
KeymasterOne of the most consistent and straightforward ways to build credit is by using a credit card.
They are an excellent way of showing credit bureaus that you can reliably pay off debt on time.
Before getting started, consider your situation. Opening your credit card is the simplest way to get started. If you don’t have any credit history or find it difficult to open your credit card, you have a few options. You can become an authorized user on another person’s account, and open a secured credit card, or a student credit card if eligible. For example, Kikoff offers a Secured Credit Card. This is a credit card that acts like a debit card and comes with a host of awesome features, like cash back and overdraft protection.
Once you’ve got a credit card, you can use it to pay for everyday expenses. That includes anything from groceries and gas to utilities and subscription bills. There are two main rules to follow:
- Always pay your credit card bill on time. This is the most important factor and is responsible for 35% of your total credit score
- Keep your credit card utilization low. In other words, use less than 30% of your total available credit. A maxed-out credit card can hurt your score.
If you want to make sure your credit card is paid off, you can set up reminders or turn on auto-pay so that you never miss a payment. As you establish a consistent payment record, you can consider raising your credit limit. This does two things. First, it allows you to spend more on your credit card. You want to resist this temptation. Second, by giving you a larger potential line of credit, if your spending remains the same, it may lower your utilization rate because you are using a smaller percentage of your available limit.
-
AuthorPosts
- You must be logged in to reply to this topic.