Financial Education

Choose the best card to build your credit score: improve your finances!

Unsure of which card is right for you? Read this guide to find out how to choose the best card to build your credit score and start improving your financial situation today!

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Whether you’re starting or trying to rebuild your credit, choosing the right credit card is important to help build your credit score.

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Credit score: top 10 questions answered

Do you ever wonder what your credit score is? Or how can you make it better? You're not alone! In this post, we'll answer some of the most common credit score questions!

This post will teach you how to choose the best options to boost your credit history and financial standing. Read on to learn more!

How does a card to build credit scores work?

A card to build credit scores can help you improve your score.

These cards report your account activities (such as payments) to the three credit bureaus: Experian, TransUnion, and Equifax.

The reports help to show that you are responsible for your credit and that you are making payments on time.

Usually, these credit cards have low credit limits and high-interest rates.

However, they are designed to repair your credit, so the lower the limit, the easier it is to pay.

There are mainly three types of cards to build credit history: secured cards and student cards or using an authorized card.

1. Secured credit cards

Firstly, a secured card is backed by a deposit you make with the card issuer. For example, if you open a secured card with a $500 deposit, you’ll have a $500 line of credit. And sometimes, you’ll have less due to the annual fee.

They are good for repairing our building credit history. The card issuers report your account activity to the credit bureaus.

So if you use the card responsibly, it can help you build a good credit score.

2. Student cards

Student cards are another type of card that can help you build your credit score if you are starting.

Typically student cards have a lower credit limit. Still, they may offer more benefits than most secured cards, such as discounts, cash back, or rewards points.

3. Authorized cards

If you don’t have the money to start by yourself, you can have a friend or family member authorize a card for you.

So you can use it, and the issuer will report the payments under your name, so you’ll start building your history.

However, as the card is linked to someone else’s account, it’s primary that the cardholder has a responsible use of credit, too.

So if they make payments on time, that will help you both to have a good credit history.

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How to build credit fast from scratch

Are you new to credit and wish to build a strong one? We can help you. Just follow these tips, and your score will skyrocket. Read on!

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What is a credit score and why is it important?

Credit Report with Score rating app on smartphone screen showing creditworthiness of a person for loan and mortgage application based on payment history and debt usage, budget management performance
Understand how your good credit score can impact your finances. Read on! Source: Adobe Stock

A credit score is a numerical representation of your creditworthiness. In other words, it’s a way for lenders to gauge how likely you are to repay a loan.

Credit scores range from bad to excellent. Check them out:

  • 300-629: Bad;
  • 630-689: Fair;
  • 690-719: Good;
  • 720-850: Excellent.

Your credit score number considers different factors. They represent how often you pay your bills on time, how much credit limit you use, and how long you have had credit.

So, if you want to improve your credit score, using a credit card responsibly is one of the best things you can do.

What are the benefits of having a good credit score?

There are many benefits of having a good credit score. First, it represents your creditworthiness, so lenders use it to determine whether you are a good candidate for a loan.

Then the higher your credit score, the more likely you are to be approved for a loan with better terms.

A good credit score can also help you get a lower interest rate on your mortgage or car loan.

In addition, having a good credit score can help you rent an apartment, get utility services, or even get public jobs.

So, if you have a good credit score, you will likely have more choices and opportunities for borrowing money.

What to consider when selecting a credit builder card?

It would help to consider a few things before selecting a credit builder card.

First, make sure the card reports to all three major credit bureaus. It is essential for building your credit score.

Second, look for a card with no annual fee. You don’t want to waste money on fees when trying to build credit.

Third, check the card’s interest rate. You’ll want to avoid a high-interest rate card, making it more difficult to pay off your monthly balance.

Finally, read the card’s terms and conditions carefully. You don’t want to get stuck with hidden fees or penalties.

Considering these factors, you can choose the best credit builder card for your needs.

Best tips on how to use your card to build credit

Young african american woman smiling happy holding smartphone and credit card at the city
Discover how to start building your credit now. Keep reading! Source: Adobe Stock

If you’re looking to build your credit score, using a credit card is one of the best ways. Here are some tips on how to use your card to build credit:

1. Keep your credit utilization low

Use your card regularly, but don’t max out your credit limit. Aim for using 30% or less of your credit limit each month.

2. Make payments on time

Make sure you always make your payments on time. Late payments can damage your credit score.

3. Use your card regularly

By showing that you can handle regular card use, you’ll demonstrate your financial responsibility to lenders.

Keep your balances low and make your payments on time to avoid damaging your score.

4. Monitor your activity

Watch your credit report to see how your activity impacts your score.

You’re entitled to one free report from each of the three major credit bureaus annually. Take advantage of this and review your report regularly.

5. Be patient

Building credit takes time, so be patient as you work to improve your score.

As long as you keep these tips in mind and use credit responsibly, you’ll be on your way to a better credit score.

Following these tips will help you use your credit card to build your credit score quickly and effectively.

Moreover, an important step to keep building your score is learning how to calculate it. Therefore, you can read our post below to learn how to calculate your score!

Man staring at wall looking at abstract design credit score mete

Learn how to calculate your credit scores!

Understanding how your credit score will be calculated is the first step to increasing it. So, find out essential information about it and start improving your score!

About the author  /  Suzana Brito

I'm a Language Studies graduate and have always been interested in writing and sharing knowledge. By creating content about finances and related products, I believe in contributing to people achieving financial freedom and their goals in life.

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