Higher Credit Score – Using a Credit Card to Build Outstanding Credit Even in This Economy

There are many ways to establish credit that are available to build the highest credit score. Some include paying off a car loan and making a mortgage payment, but the most common and easiest way to build personal credit is to use a credit card. When you first get a credit card, there are many rules to understand, such as debt service and not carrying more credit than you can afford.

If you make two thousand dollars a month, you shouldn’t go to the mall and charge your credit card for more than two thousand dollars. Or, for that matter, any amount you can’t pay back isn’t a good idea. That’s just irresponsible and you can damage your credit if you use it this way, which is not the reporting process for the highest credit score. As long as you use your credit card on items you would normally buy and could normally afford, you’ll be fine.

However, you want to establish a small debt and be able to show that you can repay it responsibly. A common myth many veterans have is that you should always pay back the exact amount of money you borrowed at the end of the month. That’s a good rule of thumb to understand, but it’s not always the best practice to apply when building credit to establish the highest credit score. The credit reporting agencies want to see that you can accumulate debt and pay it off above the minimum monthly payment. After paying your monthly payment, if you still have a few dollars in there, you’ll be fine. In fact, this will actually help increase your credit score. Just make sure you don’t go over 35% of your credit limit.

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