A good credit score is the key to enjoying better financial opportunities, from lower interest rates on loans to seamless apartment approvals. Building your credit history is essential to achieving a good score, and there are various ways to do it, including getting a credit card.

Credit cards, when used strategically, can be a valuable tool for building the credit you need to reach your financial goals. In this guide, we explain how to use a credit card to increase your credit score and present other solutions that can help you on your credit growth journey.

Can Credit Cards Help Build Your Credit Score?

Yes, credit cards help you build credit because the card issuers report your account activity to the major U.S. bureaus—Equifax, Experian, and TransUnion. Based on the data, the bureaus create your credit report and assign you a credit score. Information that typically counts toward your credit score includes:

• Your payment history 
• The total amount owed
• The length of your credit history
• Your credit mix
• Your new credit applications

To build credit with a credit card, you’ll need to apply for one or use someone else’s card as an authorized user. There are different types of credit card options to try; here’s a list of the most common ones:

• Secured credit card
• Unsecured credit card
• Student credit card
• Rewards credit card
• Travel credit card
• Balance transfer credit card

If you’re just starting to build credit, it may be difficult to obtain a traditional credit card because of your low score. However, two beginner-friendly options on the above list can get you started. Find a quick overview of these options in the table below: 

Card Type	Description	Pros	Cons
Secured credit card	Requires a refundable security deposit, which serves as the credit limit	• Helps build or rebuild credit • Is easier to qualify for	• Has high fees • Offers limited benefits
Student credit card	Designed for students; offers rewards and perks	• Builds positive credit  • Offers lower fees	• Has low credit limits • Offers high-interest rates

You can choose any of the cards to start building your credit score and then grow from there.

The Best Way To Improve Your Credit Score With Credit Cards (5 Strategies)

Building credit with a credit card requires time and patience, but you can start taking positive actions immediately. Here’s how to use a credit card to raise your credit score:

1. Choose a credit card that matches your spending
2. Make on-time payments monthly
3. Use only the credit needed
4. Keep an eye on your credit report
5. Reduce new applications for credit cards

Choose a Credit Card That Matches Your Spending

A credit card that fits your spending needs is one with a limit that’s over your spending budget. If you get a card with a lower limit, and your monthly spending rises close to your available limit, your score could be reduced.

This is because your credit utilization ratio is one of the most important factors that affect your credit score. The credit utilization ratio compares how much credit you use to how much credit you have in total. If your credit utilization is so high that it’s almost equal to your credit limit, lenders take it as a sign that you have poor debt management skills—which is bad for your score.

If you already have a credit card, and you observe that you’re using over the recommended 30% credit utilization, you can ask your credit issuer to increase your credit limit. This will help balance your account, provided you don’t increase your spending.

You should also choose cards with benefits relevant to your specific needs. For example, if you’re an avid traveler, you could pick a card that offers travel cash back rewards, which would enable you to pay off your debt balance monthly.

Make On-Time Payments Monthly

On-time payments are the most important factor when it comes to positive credit building. To build positive credit with a credit card, you should make at least the minimum payment on your credit balance every month. 

Missing or making late payments, even once, can significantly lower your score. It leaves a negative remark on your score that remains on your report for up to seven years. It may also cost you promotional interest rate offers, or the issuer may charge you a fee. 

If you have too many payments to keep up with and forget a few, setting up an automatic payment system can be useful. Autopay helps you pay off the minimum payment when it is due, and then you can offset the remaining credit card balance later in the month.

Alternatively, you can charge all your bill payments to one specific credit card and focus on paying off the balance of one card monthly. 

Use Only the Credit Needed

If you’re using a credit card to build credit, you must be aware of the propensity to spend above your means, which quickly leads to debt accumulation. 

It’s not about how much credit you have available but how responsible you are in managing it, which is what lenders want to see. This means you must develop financial discipline to charge only what you can afford to pay and learn to keep your credit balance low. Overspending makes you appear less creditworthy, even if you manage to pay off the balance eventually. Making unnecessary purchases leads to debt and increases your recurring interest charges, making it more difficult to pay off the balance every month. 

Poorly managing your available credit eventually damages your score, and multiple missed payments could cause it to stop growing. 

Keep an Eye on Your Credit Report

Everybody makes mistakes, including creditors and major credit bureaus. Sometimes, creditors may send the wrong credit account information to the credit bureaus, or the bureaus may mix up your information, leading to errors in your report. In most cases, these errors cause your score to drop.

It’s important to thoroughly review your credit report often to detect and clean up errors affecting your score. Monitoring your report also allows you to catch credit card fraud activity to quickly stop unauthorized spending in your name that is damaging your score.

To dispute errors in your report, follow the specific steps for each credit bureau or choose a reputable credit score improvement service to handle the process for you. Note that these services usually come at a high cost and may sometimes be risky.

Reduce New Applications for Credit Cards

When you apply for a new credit card, you trigger a hard inquiry or a hard pull. A hard inquiry is the aftereffect of a creditor, landlord, or employer checking your credit score with your permission. It typically causes a small drop in your score, and it remains visible on your credit report for up to two years. After this time, it falls off naturally, which may lead to a credit score increase. 

A single hard inquiry doesn’t significantly damage your score unless your score is already very low. If you make multiple applications for new credit in a short period, though, it triggers several inquiries and could do more harm. Lenders view multiple credit applications as an indication that you are overextended or in dire need of financial assistance, which makes it risky to lend you money.

However, bureaus understand that multiple credit inquiries may be unavoidable if you check out multiple creditors in search of better interest rates. In this situation, they recommend making all your applications within 30 days so they can compress all inquiries and tag them as a single one.

Doing this will keep the damage to your score minimal and protect your credit score.

6 Top Credit Cards To Build Credit

As we mentioned earlier, it may be difficult to increase your credit score with traditional credit cards if you are new to building credit. The following cards are designed for building credit and can assist with your goals:

1. Discover It Secured Credit Card
2. Bank of America Travel Rewards Credit Card for Students
3. Target Circle Card 
4. AvantCard
5. Credit One Bank American Express Card for Rebuilding Credit
6. FIT^TM Platinum Mastercard

Discover It Secured Credit Card

This secured credit card requires a refundable security deposit between $200 and $2,500. This amount will serve as your line of credit and available credit limit. It has no annual fee and is suitable for users with limited or no credit. 

After seven months, Discover will review your accounts to determine whether you are eligible for an upgrade to an unsecured credit card. You also receive 2% cash back at gas stations and restaurants and 1% cash back on other purchases. 

Bank of America Travel Rewards Credit Card for Students

This is one of the best credit cards for students. It works just like a regular credit card, but you must provide proof that you are a student at an accredited school. The card comes with a welcome offer and rewards on every purchase. It charges $0 for annual fees and offers long interest-free periods on purchases. 

As a travel rewards card, it waives foreign transaction fees and lets you book trips on any site without restrictions. You also redeem points to pay for flights, dining purchases, car and vacation rentals, and more.

Target Circle Card

This is a store rewards card with a $0 annual fee, which is also one of the easiest to get approved for. You don’t need a security deposit to apply for this card. If you shop at Target often, this card can help you save money as well. It offers 5% off when you shop with it at Target—whether in-store or online—and 2% when you spend on gas or dining elsewhere. 

When using this card for shopping, be careful to avoid overspending. Many store rewards programs aim to encourage users to buy more, so ensure you stay within your budget.

AvantCard

The AvantCard is an excellent option if you need a card that helps you strengthen your credit while still rewarding you. There’s no limit to the monthly rewards you can earn on the card, and you get 1% cash back on every purchase you make, wherever Mastercard is accepted.

Applying for this card is fast and easy, and you don’t have to make any deposits or pay an annual fee. If you use your credit responsibly, you may also be eligible for a periodic credit line increase over time. You can check whether you qualify for the AvantCard without affecting your credit score. 

Credit One Bank American Express Card for Rebuilding Credit

This is a good choice for growing your credit, but it offers much more. Although it comes with a $75 annual fee in the first year and $99 thereafter (billed at $8.25/month), the cost is made up for in rewards and insurance. 

When using this card, your credit is reported to the major credit bureaus every month, and you get your credit score and credit report summary online. It requires no initial deposit, making it a safe and affordable way to grow your credit. 

You also earn 1% cash back on eligible utility bills, gas, and grocery purchases and get deals when you shop, purchase food during a trip, or pay for entertainment through Amex Offers. It offers Retail Protection that covers you if an eligible item is damaged or stolen, and with $0 fraud liability, you won’t be responsible if unauthorized charges occur through your card. 

FIT^TM Platinum Mastercard

If your credit falls below the bar, the FIT™ Platinum Mastercard can help you build it. However, there’s a catch—you can only get a $400 initial credit limit. With responsible card use, you could potentially rebuild or improve your credit and get a credit line increase. 

It’s an unsecured credit card, so you don’t have to make a security deposit. However, you’ll need to pay an annual fee of $99 in the first year and $125 afterward. You can use your card everywhere a Mastercard is accepted, but note that cash advances and foreign transactions all incur a fee. 

This card gives you access to your Vantage 3.0 Score if you sign up for e-statements. It also provides Mastercard Zero Liability Protection for eligible unauthorized purchases. 

Is a Credit Card the Only Way To Build Credit?

No, there are diverse other ways to build credit apart from credit cards. For example, you can try any of the apps that help you improve your credit or apply for a credit builder loan. 

Credit building companies like CreditStrong offer short-term installment loans or revolving lines of credit designed to assist users with no or limited credit history looking to rebuild their credit. By making regular payments over a set period, you build a positive payment history as the lenders make reports to the credit bureaus. Consistent on-time payments are crucial for improving your credit score. 

Increase Your Credit Score Reliably With CreditStrong 

CreditStrong is an independent community bank created by Austin Capital Bank to help consumers become creditworthy through on-time monthly payments. It’s a credible and reliable credit building alternative because your money is FDIC-insured—protected from bank failure. 

To help you build credit, the company offers a secured consumer installment loan or a revolving line of credit. The funds are then locked in a savings account while you make monthly payments to repay the loan, building your credit history. At the end of the term, the funds are unlocked for you to access. 

CreditStrong Accounts and Their Functions

CreditStrong offers three main types of accounts: Installment (Instal), Revolving (Revolv), and MAGNUM. The table below describes how each of them functions:

CreditStrong Account	Key Function
Instal/CS Max	It offers a fixed loan of up to $1,100 with regular payments over a set term. It helps to build your savings and earn up to 45 points of credit
Revolv	It includes a flexible credit line you can borrow from and repay as needed. It helps lower credit utilization and builds up to 62 points of credit
MAGNUM	It offers an installment loan focused on building a substantial credit history of up to $30,000. It builds your credit history for longer and grows your score by 86 points

These account types offer various affordable pathways to establish your creditworthiness.

How To Open a CreditStrong Account

To open an account with CreditStrong, take these steps:

1. Click here to get started and discover CreditStrong account options
2. Choose any of the three CreditStrong accounts:
   • MAGNUM—Starting at $30 a month
   • Revolv—$99 a year
   • Instal—Starting at $28 a month
3. Submit your completed online application
4. Keep track of your progress via your credit dashboard

CreditStrong helps improve your credit and can positively impact the factors that determine 90% of your FICO score.

Start Building credit today