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How to Effectively Build Credit with a Credit Card
Ways to build your credit score using a credit card

Building your credit is important if you want to secure an advantageous loan for a home, car, or other big-ticket item. If your credit score is lower than it should be to help you get the financial gains you want, there are several ways to bump it up. The following methods will help you increase your credit score when using a credit card.

Know your numbers

Although credit reports are not exciting to read, they hold vital truths about your financial health. It is important to review your credit history to spot any irregularities or mistakes that may be working against you. It is also important to find out what you are doing right with your money management.

“Pull a copy of your credit report from each of the three major national credit bureaus: Equifax, Experian, and TransUnion. You can do that for free once a year through the official website. Then, review each report to see what’s helping or hurting your score,” advises Rebecca Lake, writer for

Be intentional with paying your balance

Paying off your balance in full is an amazing feat, but paying it off before it’s due can work wonders on your credit score. Since your credit score is calculated after your balance is reported to a credit bureau by the card issuer, the lower your balance, the better your credit utilization will be.

“A simple way to do that is to pay down the balance before the billing cycle ends or to pay several times throughout the month to always keep your balance low,” advises Bev O’Shea, writer for

Stay within your limits

In addition to paying your bills on time and your balance in full, you need to stay within spending limits to protect your credit score.

“Using more than 30% of your credit risks damage to your score. 1%-10% utilization will help your score the most. And, of course, don’t spend beyond your means, regardless of what your limit is,” advises Adam McCann, writer for

But ask for a higher one, too

You can decrease your credit utilization percentage, even without changing your balance, by increasing your credit limit.

“If your income has gone up or you’ve added more years of positive credit experience, you have a decent shot at getting a higher limit,” according to O’Shea.

Prioritize rewards in your credit card choice

There are many credit cards to choose from, but one that offers rewards will serve you better. Every time you swipe or hand over your card to a retailer, you are showing the issuer that you are an active participant in the relationship.

“If you opened a rewards credit card, start using the card to make purchases that will earn you points, miles, or cash back. Little or no activity could result in the bank reducing your credit limit or closing the account, and your credit score could drop as a result,” according to Tanza Loudenback, writer for

These tips will help you build credit when you use a credit card.

Published by IBEW And United Workers Federal Credit Union
Includes copyrighted material of IMakeNews, Inc. and its suppliers.
Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.  

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