credit card

How To Use a Credit Card to Build Your Credit 

Credit—it’s an important part of everyday life. Having a good credit score is essential when you need to buy a car, buy a house, rent an apartment, and so much more. However, it can be difficult to understand how to build your credit and increase your credit score. 

Did you know that it’s possible to use a credit card to build your credit? At MPowering America, our experts specialize in helping our clients with financial planning and becoming debt-free. Read on to learn more about building your credit score by using a credit card. 

Apply For a Secured Credit Card or a Starter Credit Card

Secured Credit Cards

A secured credit card is a good choice of card for people with limited credit or bad credit. Why? Because secured credit cards offer nearly guaranteed approval, and they report information to major credit bureaus monthly. 

Secured cards work just like any other credit card, but do require you to place a refundable security deposit on the card, and the credit limit usually equals the amount of the security deposit.

Starter Credit Cards

Another great way to establish and improve your credit standing easily, especially if you have limited credit, is to get a starter credit card. Starter cards usually have a $300+ starting credit limit. Unfortunately, starter credit cards are not known for their low interest rates. 

Your biggest goal when choosing a starter credit card should be to pay as little as possible in fees and interest. By choosing a card with low fees and interest rates, you should be able to build credit in an inexpensive way, provided you make your payments on time and in full each month.

Always Pay on Time and in Full

As mentioned above, paying on time and in full is one of the most important steps when it comes to building your credit with a credit card. In order to have good credit, you need to have a record of on time payments. Putting your regular expenses on your credit card instead of your debit card and paying off your credit card bill each month will help you build your credit. 

Paying in full and on time also keeps you from having to pay interest on your card. Payment history makes up 35% of your FICO credit score, so this is one of the best and easiest ways to build your credit and improve your credit score. 

Other aspects of your credit score include:

  • Amounts owed: 30% 
  • Length of credit history: 15%
  • New credit: 10%
  • Credit mix: 10%

Keep Your Balance Low and Your Accounts Open

The amount you owe makes up 30% of your credit score. The amount you owe in relation to your overall credit is called your credit utilization ratio. By keeping this amount low, you can significantly boost your credit. Try to keep your credit utilization ratio at 30% or lower.

If you are keeping your balance low, you should also hold on to your credit card as long as possible. The longer your credit use history, the more reliable you seem to lenders. Keeping your accounts active and open will lengthen your credit history, a factor which accounts for 15% of your FICO credit score.

Give us a Call to Improve Your Credit Score

At MPowering America we have proprietary systems, technologies and strategies that can help you improve your credit score. We’ll work with you to build a financial plan that allows you to lose the debt and eventually be on a path of total financial freedom. If you have questions about building your credit by using a credit card, call us today to learn more. We’ll help you get started on your journey towards a debt-free life.


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Matt Lovelady is a co-founder of MPowering America. He is a financial expert who has been in the financial services industry for over 22 years. Matt is dedicated to educating people on how to increase their income and reduce their debt.