How to improve credit score with first credit card?
Question by RainDog: How to improve credit score with first credit card?
Hi there. I have just received my first credit card. I struggled to improve my credit enough to finally qualify for a card. I had to start with a bottom of the barrell card, however, as my score currently averages 600. This card has a high APR, high penalties and a yearly fee. I am looking for advice on how to use this card as a tool to improve my credit. I’ve received a lot of conflicting information.
Best answer:
Answer by CHES
I used to work for a credit card company..
Most people think that if you pay your credit card purchases in full, you’ll have a higher score.. but actually, credit card companies prefer to give higher scores to those who leave out a few amounts that would earn interest.
For example, your credit card bill is $ 50 and you pay that in full, it means that there’s no interest.. But if you only pay, say around $ 30.. the $ 20 that was left would incur interest, and card companies like that.
What do you think? Answer below!
The best way to improve your credit score is to use that card to purchase some of the things you normally pay for in cash. When the bill comes each month, pay it off in full.
If you continue to do that for 8 to 10 months, you’ll see your credit score improve. In the meantime, you’ll just have to live with the yearly fee but since you are paying the balance in full each time the bill comes, you aren’t paying anything in interest.
Don’t be tempted to let the balance ride for a while, because this will lead to you having a bill higher than you can pay and cause you interest expenses as well.
After about a year, you should be able to get a card with a better rate or you may be able to renegotiate your annual fee and interest rate on the same card.
Never, ever make a late payment. Use it regularly and never use more than thirty percent of the balance.