How to Use Credit Cards to Boost Your Credit Score

Credit cards are one of the best and most immediate ways that people can increase their credit scores. Generally, credit card issuers report to the three major credit bureaus, Experian, TransUnion and Equifax when their credit card clients pay their bills on time. Just this simple fact helps these people’s credit scores to steadily increase.

Do Not Use the Entire Credit Limit

Consumers must not obtain a credit card and use it with reckless abandon. They do have a strategy they need to follow to make the credit card a great conduit to the highest credit scores. The first thing that people must not do is use up their entire credit limits. This will lower their scores and show that they have too much debt. Each month, consumers need to make sure they only use 30 percent of their limits at the most with 10 percent being ideal.

Pay the Monthly Bills on Time and In Full

The credit card bills will come every month, and these statements give people a choice. They can pay the minimum amount, the entire balance and anything in between. By paying the entire balance, they do not leave anything that can be subject to the interest charge. If they pay these bills before the due date, they will be reported as never being late and their scores will benefit.

Transfer the Balance from a High-Interest Card to a Low-Interest Card

It may seem counterintuitive, but obtaining a new credit card can be a way for people to lower their credit card balances. In turn, their credit scores will increase. As people leave a balance on their cards with a high interest rate, they have difficulties paying down this debt because so much interest is being added every month. This shows they have excessive debt and lowers their scores.

By transferring a balance to a credit card that has a zero percent interest rate for a period of time, consumers have a chance to pay down the balance while no interest is being added. Paying down their debts is what will demonstrate that they are taking better control of their finances, and they will notice a better credit score afterward.

Ask for a Raise

It looks better to everyone if consumers have more credit available to them than they are using. By checking on the limits they currently have on their cards and asking for a raise on the particularly low ones, consumers will instantly improve their credit situations. They will have a lower credit-to-debt ratio and a higher credit score.


About the Author:  Haliegh Adams is a writer for payroll services. In her spare time, she likes to play with her daughter and go fishing and hiking.