Use a Credit Card to Boost Your Credit Score
Your best weapon in the battle to boost your credit? Your very own credit card
Believe it or not, a credit card is one of the most essential things you'll ever get your hands on. It's far more than a piece of plastic. The credit card represents not just your ability to make purchases now and pay later, but your entire financial future in a little plastic card.
In other words, the vast majority of your credit history is going to come from payments you make on your credit card. Given that, it's important to use that card wisely -- by following these tips.
1. Make small regular payments
Some people pay off their credit card balance in full each month. In fact, though, this isn't the ideal way to build a high credit score. Your credit history considers your frequency of regular payments, not the total amount you pay back. So someone who regularly makes payments on a $500 debt will have a higher credit rating than someone who makes a $20,000 purchase and immediately repays the money in full.
It sounds counterintuitive, but remember, credit is all about extending money. If you pay your debt in full each month it doesn't tell people how you'll handle something like a mortgage, which is virtually impossible to pay in full.
2. Don't apply for too many cards
Every time a company does a credit check on you for the purpose of extending credit, you get a small black mark on your credit report. If there are one or two, there's nothing to worry about, but if you apply for fifty different credit cards and every one of them checks you out, you have a problem.
You only need one credit card or, at most, two. Don't make your life more complicated than it has to be by constantly applying for every offer that comes down the river.
3. Manage your finances
It should go without saying, but your credit score is all about financial responsibility. With that in mind, the best way to build your credit score is through controlled spending and careful repayments made on time.
If you follow these tips, your credit card alone can give you a shining credit rating.
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