How to Use a Credit Card to Build Your Credit Score

My first experience building credit was with a credit card that I opened while I was attending college. Thankfully, I avoided the classic college mistake of maxing out the card in the first month of ownership, then living with debt for the next 10 years. My goal was to apply for the credit card, make a several hundred dollar purchase, then pay off the loan over a couple months to prove I was capable of making regular payments. I paid a few dollars in interest charges over the time I made those payments, but in my opinion, a few dollars in finance charges was well worth building my credit history and credit score.

It has been well over ten years since I opened my first credit card and I haven’t made a finance charge on a credit card since then. That experience and several other successful loans since then have helped me build a high credit score and a favorable credit history.

Using credit cards to build credit history and credit score

Credit cards aren’t the only way to establish your credit history, but they are usually the easiest way to create a credit history because it is usually easier to open a credit card than other forms of credit such as a car loan or mortgage (lenders are less likely to lend that much money to someone who doesn’t have any credit history).

Once you have established a line of credit, your actions are reported to the credit bureaus which begin recording your credit history on  your credit report. Over time, your actions will be used to determine your credit score. Here is more information about the difference between credit report and credit score.

No credit or poor credit? If you are having trouble getting approved for a credit card, then you should check out secured credit cards, which require a deposit and sometimes come with an annual fee. The deposit works as collateral for your charges and if you don’t make on time payments, the bank will use your deposit to pay your charges. Secured credit cards cost a little more than traditional credit cards, but they often come with guaranteed approval and with proper use will help you improve your credit score. After proving your ability to make payments, you can often upgrade your secured credit card to a non-secured card that has a better interest rate and doesn’t come with annual fees.

Important notes about building credit with a credit card

Getting a credit card can help you build your credit so long as you treat it responsibly – otherwise you are only going to hurt your credit score. Credit cards can be a trap for some people, so it’s best to make sure you only make charges you can and will pay in full each month. Otherwise you may find yourself getting into a cycle of debt that is difficult to escape from.

Tips to establish your credit and increase your credit score:

  1. Understand how your credit score works.
  2. Only charge what you can pay with cash.
  3. Pay your full credit card bill each month.
  4. Repeat the process.
  5. Add time.

What is a good credit score range? The key to establishing a good credit history and good credit score is being able to prove that you are responsible and can continually pay loans that you receive. There is no silver bullet to improving your score quickly; it takes time and commitment.

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Date published: February 19, 2010. Last updated: November 8, 2010.

Article by

Ryan Guina is the founder and editor of this site. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is currently serving in the IL Air National Guard. He also writes about money management, small business, and career topics at Cash Money Life. You can also see his profile on Google.


  1. The Rat says

    Nice post. I think credit cards are a great way to build a solid credit history. By paying off debt fast, you build credibility and this can help you down the road when it comes time to apply for a loan or make big purchases.

  2. says

    I like the post. Sometimes credit card are helpful and sometimes stressful for those who use them on unnecessary things. Moreover, the tips that we need to understand before applying the credit card is really true and nice. We should know how to use them properly and attempt to pay the credit card bills every month.

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