December 12, 2023

Use Credit Card To Build Your Credit History

Using a credit card is one of the easier ways to build up your credit history. Provided you use it smartly. Recklessly swiping your card to the fullest limit every month and not repaying regularly will only land you in trouble. Understanding the nuances of using a credit card and using it strategically, can help you lay the foundation for a good credit history, which in turn can act as a stepping stone for your larger financial goals. Let’s see how.

Understanding credit utilisation

Simply put, the credit utilisation ratio is the percentage of your credit card balance to your credit limit. It is the amount you have spent on your credit card in comparison to the total credit limit available on your card.

A lower credit utilisation ratio speaks volumes about your financial discipline, impacting up to a third of your credit score.

  • Keep balances low: It is prudent to maintain your credit utilisation below 30% of your available credit.
  • Multiple payments: Making several small payments, known as micropayments, throughout the month could keep your credit card balances down.

Timing your credit card payments around the card’s billing cycle rather than the due date could showcase you as a prompt payer and possibly boost your credit score.

This proactive approach means your card issuer reports the lowest numbers to the bureaus, reflecting well on your financial profile.

Benefitting from varied use and prompt repayments

Diversity in the type of spending can positively influence your credit score. Using your credit card for a mix of transactions, be it your daily expenses, monthly utility bills, or yearly holiday shopping displays your ability to handle credit responsibly.

Additionally, it is crucial to maintain the importance of regularly paying off your credit card balance. This practice not only saves you from the debt spiral and hefty interest accumulation but also fortifies your credit history, making you a favourable candidate for future loans or rent agreements.

Securing your score with alerts and updates

In today’s digital era, maintaining a healthy credit score goes beyond just regular payments; it is about active monitoring and swift action. Regularly reviewing your score can help you identify and address any discrepancies swiftly.

Additionally, enabling transaction alerts acts as a safety net, immediately notifying you of unusual activities, thus preserving your credit score’s integrity. With these measures, you not only maintain but also fortify your financial reputation.

Reaping the rewards while building credit

Who said building credit can’t come with its perks? Choose credit cards that reward your spending with cashback offers, discounts, or points that you can redeem for various goodies. Imagine earning reward points for transactions you would make anyway, all the while boosting your credit.


Building a robust credit history using a credit card is a strategic move in cementing your financial stability. By choosing a card that caters to your needs, understanding the nuances of credit utilisation, diversifying your transactions, and staying informed about your credit status, you are not just spending but also investing in your financial future.

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