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ask: What is a good way to build your credit score?

By Erin Kennedy HERWriter
 
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What is a good way to build your credit score? 0 5
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I have a credit card, but don't use it very often. Usually I only use it for bigger purchases like a plane ticket, then pay it off right away. I heard it's good to start building your credit score early and maintaining it, though. What are some ways I can build a good credit score?

Add a Comment2 Comments

Shana O'Connor

Great question, Erin. Great response, Maryann! Women need to learn how to be financial healthy starting at a young age.

Erin, I would suggest using your credit card more often and making it a monthly habit of paying it off.

In the past I have been scared to use my credit card and frankly hate the idea of buying anything you can't afford to pay in cash, but it's a matter of life. In most cases, you will not be able to purchase a home in cash.

If you are nervous about using a credit card more often like I was, maybe start with using it for regular purchases like gas and groceries every month. This will also help you manage your monthly expenses :)

It really all comes down to this...the most important thing you can do to build your credit is make purchases on your credit card and pay it off on time.

August 13, 2014 - 10:54am
Maryann Gromisch RN Guide

Hello Erin,

That is a very good question.

Your payment history is the number one factor on your credit score. Making loan payments or credit card payments on time will raise your score more than any other factor.

Getting a credit card is the quickest and most effective way to start a credit profile.

Use your credit card wisely. Dan Kadlec wrote for CBS Money Watch.
"Never miss a payment. Pay in full if you can. If you must carry a balance it won't hurt you unless your balance is relatively large. Never charge more than 30% of your credit limit and preferably keep it closer to 10%. And don't apply for more than one card at once or with any frequency."

Mr. Kadlec suggested one should not close an unused credit card account. "Canceling a card can lower your score because it leaves you with less overall credit and instantly raises the percentage of debt capacity you are using. A long credit history is part of what makes for a high credit score. So keep those older accounts and make sure they are in good standing."

I hope this is helpful.

Regards,
Maryann

August 13, 2014 - 9:07am
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