How to Build Credit with a Credit Card - Top Tips for 2024 (2024)

You can build credit with a credit card by usingit every month, paying off your purchases on time, and keeping yourcredit utilizationlow (below 30%). It’s even possible to build credit with a credit card without making purchases. For instance, you could lock your credit card in a drawer and still see your credit score improve over time.

Regardless of your exact approach, the key to building credit is to get a credit card as soon as possible and then avoid missing monthly due dates. Simply having an open credit card account is the easiest way to build credit, and payment history is the biggest ingredient in your credit score. With that being said, we’ll lay out our ideal approach to building credit with a credit card below.

Best Way to Build Credit With a Credit Card

1. Apply for asecured credit cardor astarter credit card.
2. Set up automatic monthly bill payments from a bank account.
3. Use less than 30% of your credit limit (ideally 1%-10%).
4. Pay your full balance by the due date (to save on interest, too).
5. Become an authorized user on a family member’s card to build credit faster.
6. Use WalletHub tomonitor your credit.

It’s always important to regularly monitor your credit to make sure that there are no errors falsely bringing down your score. And don’t forget that you can get personalized tips on how to build credit with WalletHub’sfree credit analysis.

Read on for more strategies for building credit with a credit card, along with the best cards with which to build that credit.

Opinions and ratings are our own. This review is not provided, commissioned or endorsed by any issuer.

Best Credit Cards to Build Credit With

There are lots of good credit cards to build credit with, including starter credit cards, credit cards for college students, and credit cards for bad credit. The best ones don’t charge annual fees and have approval requirements that are easy to meet (some cards are from WalletHub partners). Below, you can find a handful of the most popular choices.

3 Ways to Build Credit with a Credit Card

1. Make Purchases and Pay On Time

   Making purchases and paying them off demonstrates to creditors that you are able to responsibly handle debt and can be trusted to stick to payment deadlines. If you never borrow money, it’s harder for creditors to predict how you would act if you did. It may seem counter intuitive at first, but utilizing at least 1% but less than 30% of your credit is actually better for your credit score than 0% utilization. So you should make purchases every month, then pay them off after your statement closes but before your due date.

   You’ll typically have a grace period of around 21 days to submit payment for your charges before you owe any interest. Ideally, you should pay as soon as you receive your statement, so that there’s no possibility you’ll be late. You should strive to pay in full, too, or else you’ll lose that grace period and owe interest right away on new purchases.

2. Open a Card & Lock It Away

   Even if you don’t use your credit card, you’ll still have positive information reported to the credit bureaus every month, because your account is “current” and you aren’t desperate to use your available credit. That will help you build your score, albeit a bit slower than if you made purchases and paid them off on time.

3. Become an Authorized User

   If you’re too young to get a credit card (less than 18 years old) or you simply haven’t had luck getting an account, there’s still a way for you to build credit through a card. You can become an authorized user on someone else’s account. That means you’ll receive a card connected to that person’s account and are able to make purchases drawing on their credit limit. The account holder is responsible for making payments, but the account information will appear on your credit report too. Being an authorized user won’t help you build credit as quickly as with your own card, but it’s certainly worthwhile.

Bottom Line: Keys to Building Credit with a Credit Card

Pick the Right Credit Card

It’s important to do research before you apply. Consider your needs, then compare the terms of cards that cater to those needs. You can use WalletHub’s credit card comparison feature to help.

Always Pay On Time

Missing a payment is one of the worst things you can do to your credit. A good payment history is essential for future approvals and credit limit increases, so make sure to always make at least the minimum payment before it’s due.

Pay In Full Whenever Possible

Paying just the minimum required will keep your account in good standing, but it won’t save you on interest. Paying in full by the due date does, though. And you don’t want to get in the habit of spending more than you can afford to repay.

Don’t Max Out Your Limit

Using more than 30% of your credit risks damage to your score. 1%-10% utilization will help your score the most. And, of course, don’t spend beyond your means, regardless of what our limit is.

Check Your Credit Score & Report Regularly

You can check your latest credit score and report for free on WalletHub. This will help you make sure you stay on the right path. It also allows you to catch errors on your report and dispute them, which can help your score.

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WalletHub is committed to transparency and editorial independence. The information about the following cards has been independently collected by WalletHub: Bank of America® Unlimited Cash Rewards credit card for Students, Shell Gas Card, Bank of America® Customized Cash Rewards Secured Credit Card, and SoFi Unlimited 2% Credit Card