Home › Forums › Credit Reports & Scores › When should I pay with a credit card to increase my credit score?
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August 26, 2023 at 8:36 pm #11962Geoff MassanekModeratorAugust 26, 2023 at 8:58 pm #11998Team StellarFiKeymaster
Using your credit card is a great way to build credit. However, if you don’t use it responsibly it could lower your credit score. Paying with a credit card for all your regular transactions such as rent, utilities, telecom bills, and streaming services can help you boost your credit score, especially if you have the payments on autopay. This way you never miss a payment deadline and you can keep your expenses in one place.
When paying for expenses through your card, make sure that the credit utilization (the percentage of available credit you’re using) on the card, or cards if you have more than one, stays below 30%.
Your credit utilization rate makes up 30% of your FICO® Score. Either keep your credit utilization as low as possible or monitor your credit utilization so that the moment it goes above 30%, you can pay off your credit card bill, whether or not it is due. This way, your credit utilization rate always gets reported as below 30%.
It is advised that you keep your credit cards active even if you don’t use them or have a zero balance on them since it keeps your credit utilization low. However, make sure that each account is at least minimally active: set up autopayments to some regular bills you absolutely have to pay, like rent or streaming services.
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