Can Your Credit Score Be Improved With A Credit Card?
The caption of this article may seem dubious, but you may well build up your credit score by using a credit card in the specific way discussed in this article. You need a good credit score if you wish to get any loans or credit applications approved quickly, and pay minimum interest rates on them. That’s why you should do what you can to get a decent credit score.
The credit bureaus like to see that you are responsible with credit and that you make repayments on time (35% of your score is based on your payment history). A good way to demonstrate a good payment history is to begin using some type of credit and paying it on time every month. An easy way of accomplishing this is to obtain a credit card or store card and begin operating it. The credit bureaus like to see a good payment history of at least 6 months in order for it to be of benefit to your credit score.
The best way to go about this is to apply for a credit card with a small limit, around the $500 mark. If you don’t want to apply for one or haven’t built up enough of a credit score to be approved for one, you can always get a secured credit card. This is where you leave the amount of the credit limit, say $500, as a deposit with the bank. And the bank gives you a credit card for that amount of money. You still need to make the repayments just as you would on a normal credit card.
You need to start using this credit card on a regular basis, on something that would be easy for you to repay by the due date. For example if you have the cash to pay for a small item, use your credit card to pay for it instead, then use the cash you were going to pay for the item as the repayment, so it is paid in full by the due date. This is what will establish that good payment history that will improve your credit score.
Please don’t be foolish and go on a spending binge with this credit card and get yourself into debt. That is not the reason for getting the card. You want to establish a good repayment history which will positively affect your credit score, so keep the items you charge within your budget so the credit card can be repaid in full each month. By using the card in this manner you will achieve your aim of an improved credit score.
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