Adam McCann, Financial Writer
@adam_mcan
You can build your credit fast with a credit card by making small purchases every month and paying them off by the due date. Using 1% to 10% of your credit limit each month can help you raise your score quickly and inexpensively if you always pay the bill on time and in full.
You should also track your credit score as you build credit. You can join WalletHub to get free daily updates to your credit score as well as personalized advice on how to improve it.
5 Tips to Build Credit With a Credit Card
1. Make sure the card reports to all three major credit bureaus.
The vast majority of credit cards will report to Experian, Equifax and TransUnion, but it’s important to double check before getting any card.
2. Make small purchases each month.
Use your card for things you would pay for anyway, like gas or groceries, and keep your total spending between 1% and 10% of your credit limit. This helps build credit without racking up debt.
3. Pay your credit card bill in full by the due date listed on your statement.
Paying on time each month is one of the most important things you need to do to build credit, and paying in full prevents interest. It’s also important to pay attention to the balance on your credit card bill because it’s used to calculate credit utilization, a big component of your credit score.
If you charge a lot to your credit card, it may be necessary to pay your bill twice a month – once before your statement closes to keep your utilization percentage low, and again to pay the remaining balance.
4. Continue the cycle every month.
The key to improving your credit score long-term is to establish good financial habits that you stick to each month.
5. Check your credit score for free to track your progress.
Checking your credit score on a regular basis helps you know if you’re moving in the right direction and can encourage you to keep up responsible behavior or alter negative habits.
Keep in mind that you don’t even need to make purchases in order to build credit. But making purchases will build your credit faster than not making any. And even though using 1% to 10% of your credit limit will be best for your credit score, any utilization ratio under 30% will be positive.
People also ask
How long does it take to build credit with a credit card?
It can take as little as one to six months to build credit with a credit card, if you’re building credit from scratch with a credit card that reports to the credit bureaus monthly. It will likely take more time to reach good or excellent credit, or to fully rebuild damaged credit.
For a general timeline on how long that will take, refer to the examples below.
How Long It Takes to Build...
read full answer by Chip Lupo, Credit Card WriterHow can I raise my credit score in 30 days?
There are several ways to raise your credit score in 30 days. Reducing your credit utilization is one of the fastest ways to raise your credit score, and you can do it by paying down debt, spending less, paying your bill more often or asking for a higher spending limit. Disputing negative information on your credit report can help quickly, too.
- Dispute Credit-Report Mistakes
- Make a Big Debt Payment
- Reduce Your Credit Card...
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