Credit Report

Sometimes you can’t get around it. You need to get credit or a loan to make a big purchase.

Unfortunately, not everyone makes good use of their credit. 56% of Americans end up having bad credit.

Luckily, you do have options. Getting a credit card is one of them.

Are you wondering how to increase credit score with a credit card? If so, we’ve got you covered with this post.

Follow the four tips below to help your credit score improve.

1. Find Errors on Your Credit Report

You would think that with how long credit cards have been around there would be checks in place that stopped errors from happening. Sadly, that’s not the case.

You can get duplicate charges, get charged too much for an item, or even get charged for something you never purchased.

Whatever the case, make sure you monitor for these errors by using websites which provide free credit report. You need to correct them, so they don’t negatively impact your credit score.

2. Keep Your Balance Low

Would you want to lend to someone that’s always on the edge of going over their limit? You shouldn’t, and neither do lenders.

Your credit utilization is what tells lenders how much of your credit you use. It’s calculated by determining how much of your total credit you use at any given time.

Keep your utilization low to keep your credit score high. Try to keep your total usage under 30% to avoid harming your credit score.

3. Don’t Close Old Accounts

Do you have a credit card that you don’t use anymore? It might be tempting to close it out.

Don’t do that.

The average age of your credit accounts has an impact on your credit score. By closing out old accounts that aren’t being used anymore, you may end up decreasing your average account age.

The more history you have on your credit, the more trustworthy you are.

4. Find a Secured Credit Card

If you have no credit history at all, it’s hard to get credit with a regular credit card. That’s what a secured credit card is for.

You can get a secured credit card by providing a deposit on your card. The deposit is used as collateral in case you default on your credit card.

You’ll get a low limit at first. But as you pay it off every month, your credit score will increase, and you’ll be more likely to get approved for an unsecured credit card.

Head to Bonsai Finance to learn what options are out there for you.

How to Increase Credit Score with a Credit Card: Final Thoughts

By now you should know how to increase credit score with a credit card. It isn’t hard, but it does take patience. Start today so you can start improving your credit score for the future.

If you want to manage your credit cards properly, it pays to have your finances in order. Head over to our finance section to learn a few tips for keeping your finances in check.