Choosing and Using Credit Cards to Build Your Credit Score

May 7th 2016

Select a Card

If you have little or bad credit due to past financial mistakes, choose your credit cards carefully. Banks are more likely to reject your application, and applying for a lot of cards can hurt your credit rating. Even if they do approve your application, you may be looking at high interest rates or fees.

One safe way to start rebuilding your credit is to choose a secured card. These cards require you to put down a cash deposit, which is usually the same amount as the credit limit. This typically ranges from $300 to $500. Although it can be difficult to come up with the initial deposit, providing it essentially guarantees that the bank is going to approve your application, and any associated interest rates or fees may be lower.

Use Your Card and Pay It Off

Simply having a credit card is not enough to improve your credit score very much. You need to use it regularly. However, be careful not to overspend. Using more than 50 percent of your total available balance can have negative effects on your credit.

Try to pay off your balance in full every month. This helps reduce or eliminate interest and fees, which can quickly start adding up and costing you more money in the long run. Be sure to make at least the minimum payment every month no matter what, because even a single missed payment can hurt your credit score.

One approach you might take is to use your card only to pay a particular expense every month. If you have a card that gives rewards for certain purchases, you can earn money back by using it in this way.


Always consider your options carefully before upgrading, but doing so wisely can help improve your score more quickly. Once you have established a solid history with one card, consider opening another one with better terms. Even simply increasing your available credit on your original card can help. Be careful not to have too many credit cards open at once, as that can appear risky to lenders.


Building good credit opens the door to getting affordable home loans, car loans and even employment opportunities. Credit cards can be an important tool for building credit, but you need to choose the right ones and use them carefully to avoid doing more harm than good. You may also want to consider consulting with a credit counselor or financial adviser for personal advice.

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