When should I pay with a credit card to increase my credit score?

Home Forums Credit Reports & Scores When should I pay with a credit card to increase my credit score?

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • #11962
    Jordan Moore
    Keymaster
    #11998
    Team StellarFi
    Keymaster

    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.

Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.

StellarFinance, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Related questions

Home Forums Credit Reports & Scores Credit Reports & Scores

Viewing 15 topics - 1 through 15 (of 223 total)
Viewing 15 topics - 1 through 15 (of 223 total)
  • You must be logged in to create new topics.