Three Ways To Use A Credit Card To Boost Your Credit Score

It’s been proven many times over that using a low credit limit credit card can help boost your credit score. As long as you make sure that the credit company reports to the three credit agencies before you sign up, then it’s only a matter of using it responsibly before seeing your credit ratings experience some much-needed improvements.

Experts estimate that two years of good credit card maintenance should be enough to show significant improvements in your credit report. If you have a score below 660, these three things should help you see moderate positive changes.

1. Paying every bill on time

Late payments, even for just one month, can do more than raise the interest rate in your credit card. It can prove enough to bring down your score considerably. A year or more of timely payments, however, should do wonders for your credit score.

2. If you have multiple cards, pay down the ones that are maxed out first

Points are deducted from your credit score any time you charge more than 50% of your credit card’s limit. It can mean even more deductions when you keep a running balance beyond that limit for an extended period of time.

So if you can, pay down the cards with balances over 50% first to avoid the penalty.

3. Keep all credit cards active, even unused ones

Cancelling a credit card (or any line of credit for that matter) goes negatively against your credit ratings. A large part of your credit score is based on how high a percentage of your available credit you are currently using. When you cancel a credit card, your available credit goes down while your existing balances remain the same, effectively reflecting a high percentage of usage.