How to Build Credit with Credit Cards


If you want to build your credit using credit card follow these steps:

1.Limit the Number of Cards You Have

You do not need more than one credit card. This includes gas cards, store cards and any other type of credit card. One credit card is all that you need. If you have too many credit cards it reflects poorly on your credit report. You may justify your store cards because of the discount. The stores are not offering the discount to be nice.

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2.Limit Your Credit Limit

You can call and request that your bank will not automatically raise your credit limit. This will stop you from getting out of control with your spending as well. You may consider setting your limit at $500.00 or $1000.00. This should be plenty to handle any spending that you may need to do in one month. If you focus on paying off these lower amounts, you should be able to fairly easily.

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3.Pay Off Your Balance in Full Each Month

You build your credit history by showing that you are responsible by paying your monthly payments on time, regularly. Pay on time and the full amount each month. By staying within your budgeted amounts on all your spending, you should be able to do this. You can avoid carrying a heavy debt load by simply never charging something that you can not pay cash for. This is the most important thing you can do to show that you can manage your finances and build your credit history.

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4.Keep the Amount of Your Used Credit Low

Using a large amount of your credit or nearly all of your available credit will make your credit score drop. If you do carry a balance for a few months, be sure that you keep the used balance around thirty percent of your available limit. If it goes higher than this and especially if it reaches the limit, you can see your credit score drop. It is important to keep this in mind if you are using your credit cards to improve your credit score.

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Avoid the Free Offers That Come with Credit Card Applications

You may be offered free pizza, t-shirts and numerous other gifts for applying for a credit card. You may figure that signing up just once will not hurt anything. You will cancel the card as soon as you receive it. These canceled cards do show up on your credit report. Save yourself the trouble by simply not applying. This will save you money and time in the long run.

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