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3 Ways Credit Cards Can Aid A Credit Score

Using, and paying off, your credit cards can help.A credit score can sometimes be the most important part of your finances: The lower your score, the more difficult it becomes to lead a quality life.

Take it from the guy who once owned a 410 credit score. Bad credit not only prevents you from owning houses and automobiles, it also makes life more expensive.

Items such as your phone, car insurance and utility bills can all be affected by bad credit, and the sooner your credit score improves, the better.

One of the best and fastest ways to improve your credit score is by properly using your current lines of credit, including your credit cards.

Too many consumers with bad credit simply go the cash-only route.

While that won’t send your credit score lower, it certainly won’t help it.

Here are 3 tips for credit card use that can actually help your credit score:

Use your credit cards often. Lenders like to see that you use the credit you are given, and the more often you use your credit cards, the faster your credit score can improve.

This includes using credit cards to pay for everyday items like gas and groceries, as well as utility bills and other odds and ends.

Always pay your balance in full. Some argue that keeping a small balance on your card actually improves your credit score. But the smart play is to always start a month with no balance.

Debt-to-credit ratio is a factor in determining your credit score, and if you have a low credit score, chances are you have debt other than just credit cards. Keeping your credit card balance at $0 helps to reduce this ratio.

Suck up the fees. Most credit cards designed for bad credit carry annual fees and sometimes processing fees, but that’s a small price to pay for rebuilding credit.

You might not realize it, but a good credit score can save you thousands of dollars (sometimes hundreds of thousands) on auto loans and mortgages, so paying a $39 annual fee for a little while is certainly worth it.

Continuing to pay your card late, going over your credit limit or paying only the minimum due are sure ways to keep your credit score in the dumps.

If you have dreams of owning your own home one day and don’t have the cash to pay for it, you’ll need a good credit score to do so, and using a credit card responsibly is a great way to get started.

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