Using a Credit Card to Raise Your Credit Score
While a credit card can help you during an emergency, it can also help you raise your credit score. Learning to use credit cards properly can help new credit holders build credit, as well. You must adhere to some responsible habits to benefit from credit card use, otherwise, you may end up in debt. You must use your card to benefit your credit score. You can use a credit card appropriately by keeping the balance low and paying your bill on time. Family members can also add you to their credit cards to help you build credit.
Keep the Balance Low
Keeping your balance low does not mean you cannot use your credit card. You simply need to pay off the most of the balance each month. Occasionally, you may need to use your card to cover an emergency expense. If you need to use your Chase Freedom Flex card for an emergency, pay it off as soon as possible. Your credit score looks better when you keep your total credit card use at 30 percent or below.
Use the Card
A credit card that sits in your wallet unused cannot help your credit score rise. Lenders like to see that you can use credit responsibly. If you don’t like to use your credit card a lot, put a small automatic payment on it each month. Many people simply set up their television subscriptions with their credit card, for example. You can also limit your credit card use to gas for your car or eating out. Pay attention to your cash back offers and rewards, however. Some credit cards give cash back for specific stores or items, as well. Look for rewards that match your lifestyle to get the most out of your spending.
Pay on Time
Late fees and interest can add up fast, making your card balance much higher than you anticipated. It can become difficult to get this debt under control if you have a tight budget. Pay more than your minimum payment due each month and try to stay below 30 percent usage to keep your credit score healthy. Some common fees that cause problems for credit card owners are late fees, high interest rates, and over-balance fees. If you have financial problems and need to miss a payment, communicate with your credit card company, as most can help you navigate the situation. Many companies help customers in difficult situations with a one-time late fee removal or payment arrangement.
Work with A Family Member
If you need to build credit or repair your credit, ask a family member to put you on their card as an authorized user. As long as your family member has good credit, you can begin to raise your score, as well. This option can help you avoid credit inquiries by applying for your own card. These inquiries lower your credit score and are not worth the trouble if you don’t get approved due to low credit. You can also get a secured credit card until your credit rises enough to get approved for a traditional credit card.
A credit card can help you raise your credit if you use it appropriately. Practice responsible usage by keeping the balance low and paying on time. You must use the card, however, to show that you can use credit responsibly. Lenders like to see good spending and payment habits. If your credit is too low to get a card on your own, ask a family member to add you to theirs to help you build your credit. With a few good habits, you can improve your credit score with a new credit card.