How to Build Credit With a Credit Card? (Best Ways to Improve Credit)

Before you begin your credit-building journey, you need to know where you’re starting from.

Many lenders and experts use FICO to calculate credit scores based on your—

• Payment history (35%)

• Amounts owed (30%)

• Length of credit history (15%)

• New credit (10%)

• Credit mix (10%)

These factors will determine where you land on the credit ladder, which is broken down into these five groups:

• Excellent: 800–850

• Very Good: 740–799

• Good: 670–739

• Fair: 580–669

• Poor: 300–579

Now that you know where you stand, let’s dive into how you can work your way up the credit score ladder (and earn those all-important bragging rights)—

Let’s say you want to speak Italian. But dreaming about mingling with the locals over pizza (and saying more than just “mamma-mia”) is a little far-fetched if you don’t have a solid foundation to get started.

Building credit without the right credit card can also be a real pizza-work.

Credit cards have different credit score requirements (so you’ll need to know your own credit score before applying).

Most cards ask for good or excellent credit—but there are also plenty of unsecured cards for those with bad credit. (These tend to have higher fees and fewer rewards, but it’s a great chance to improve your credit score and graduate to a better card.)

Or maybe you have fair credit—you're just looking to improve it. These three cards below are great options for that. Why not build credit and get some rewards while you're at it?

Upgrade Cash Rewards Visa® 4.4	Capital One QuicksilverOne Cash Rewards Credit Card 3.6	Capital One Platinum Credit Card 3.5
Annual fee $0	Annual fee $39	Annual fee $0
Rewards rate 1.5% Earn 1.5% unlimited cash back on card purchases every time you make a payment.	Rewards 1.5%–5% 1.5% cash back on every purchase, every day. 5% cash back on hotels and rental cars booked through Capital One Travel (terms apply).	Rewards N/A
Intro offer $200 Earn a $200 bonus after you open a Rewards Checking account and make 3 debit card transactions within the first 60 days.	Intro Offer N/A	Intro offer N/A
Learn more	Learn more	Learn more

When researching credit cards, here are some key features to look out for—

• Credit score requirements

• APR (annual interest rate)

• Annual fees

• Rewards and perks

• Cash back schemes

• Introductory offers

When you apply for credit cards to build credit, it usually only takes a few minutes. Just be careful how many times you apply, as your credit score can take a hit each time a credit issuer checks your credit history.

We’ve all been there. You rock up at a restaurant fifteen minutes late and blame it on the terrible traffic. But in the world of credit, tardiness just doesn’t fly.

Your payment history makes up 35% of your overall credit score—so any late or missed payments will have a notable impact.

If you want to build credit fast with a credit card, you can start paying off your card balance in full (and avoid paying extra interest).

If that’s not possible, aim to make regular monthly payments.

If you’ve taken a loan out in the past and it’s still hanging over you—it’s not all bad news. If you make punctual loan repayments, your good behavior will get reported to the credit bureaus, and that credit score will start to creep back up.

Be careful not to make a missed or late payment—the credit issuer will report it to the credit bureaus if it’s over 30 days late. It can stay on your record for up to seven years.

Credit Card Payoff Template for Excel

Lay out your credit card debt with the minimum payments and interest to see how long it will take to pay off!

What you will get:

• Interactive dashboard

• Customizable to your needs

• Stay on track with charts and graphs

• Suitable for up to 16 or 32 debts!

Get this template

There’s always a little guilt after going out to buy a new pair of shoes and coming back with the entire store. But when it comes to building credit, you can feel a little less guilty about your spending habits as long as you increase your credit score with credit card payments—

Regular purchases show card issuers that you’re making the most out of your account—instead of leaving it unused. Your length of credit history—which covers how long you’ve been using your accounts and how active they are—makes up 15% of your credit score.

But as much as that payday shopping spree is calling to you—watch out not to spend more than you can afford to pay off.

A smart way to hack the system is to make small recurring transactions every month, like household bills or subscription services.

And if you’re the forgetful type, you can automate your account so you never make a late or missed payment.

“Jack of all trades, master of none” can be great for a small-town circus performer with a bunch of tricks up his sleeve—but it won’t work in your favor when it comes to building credit.

Instead of clowning around, it’s better to show predictability and consistency. When you build up your credit on one card, the bureaus can know what to expect from you.

Applying to a bunch of new cards lowers the average age of your accounts—which isn’t good for your credit score. Unusual behavior can also send red flags to lenders who might think you’re in some financial trouble.

Getting a new card is fine. Just don't go crazy and get two, three, or even more. Choose a card that's best for you and stick with it.

Read more: How Many Credit Cards Should I Have?

A word of warning—we’re about to talk numbers.

But don’t skip over this part yet, this one’s important. We’re going to keep you here by breaking it down.

Your credit utilization ratio is a fancy way of describing how much available credit you’re using.

You can figure this out by—

1. Calculating the sum of all your revolving credit balances.

2. Calculating the sum of all your credit limits.

3. Dividing the total revolving credit balance by the total credit limit.

4. Multiplying the amount by 100.

If Card A has a revolving balance of $200 and a limit of $1000—and Card B has a balance of $150 and a $600 limit—you would end up with a 21.8% overall utilization.

And if this is close to your own figure—congratulations.

Anything below 30% is considered a good credit card utilization (and if you’re below 1%, you’re passing with flying colors).

We’ve wrapped our heads around the maths—but how do you keep that utilization low?

If you have a low credit limit, try limiting your credit use and paying off your card’s balance before the due date. (You can also pay your monthly balances twice a month to really boost your score.)

You’re finally ready to level up in your life plan—you’re going to make roots, get a mortgage and find a house that’s big enough for you and your ever-growing animal jumper collection.

A high credit card limit makes getting a mortgage or car loan much easier—but it’ll also help lower your credit utilization ratio. (And if we managed to keep your attention earlier, you’ll know that’s good news for your credit score.)

But this one isn’t as simple as calculating a few figures. You’ll have to show responsible credit behavior over time—make sure to keep your credit utilization low, and show you’re financially stable.

From there, you can request a higher credit limit on the card issuer’s website or call them if you prefer to speak with an actual human.

Raising your credit limit is a good idea if you want to raise your credit score. But don’t rely on this tactic if you’re struggling financially—it can easily backfire and land you in debt.

The new year is here, and you’re jumping on the health and fitness bandwagon (hopefully, for more than three weeks this time).

Like with any goal, monitoring your progress can make all the difference. The same rules apply here (minus the guilty pleasures).

To help you out, Experian offers a free credit report, where you can access a bunch of features, such as—

• Current credit balance

• Payments history

• Total debt

• FICO credit score breakdown

• Daily credit monitoring

By tracking your credit status and activity you can also spot and dispute any errors or suspicious transactions which could be affecting your credit score.

Keeping tabs on everything will help you pinpoint where you're falling behind and which areas you need to improve.

(Check out this free credit monitoring tool to keep an eye on your financial goals.)

Think of it this way—the three credit bureaus are Big Brother and the audience. They’re watching your every credit move.

Crazy behavior can raise eyebrows, and you’re here to win—so play it safe and stick to the rules of the game.

To keep control of your spending, try creating a budget and a plan to pay off your balance or monthly bills on time and in full.

Show how responsible you are by limiting new credit card applications, staying out of debt, and keeping your credit utilization low.

Follow these steps, and you’re sure to take home the crown (and an excellent credit score).

	Name	Score	Visit	Regular APR	Regular APR	Intro Offer	Credit Needed	Disclaimer
	Petal 2 “Cash Back, No Fees” Visa	8.8	Visitpetalcard.com	18.24% - 32.24%	18.24% - 32.24%	N/A	Bad to fair (300-600)

If you want the freedom to splurge (while not overspending), the Petal® 2 "Cash Back, No Fees" Visa® Credit Card has an impressive credit limit of $100,000.

And you’ll enjoy spending even more with their cash back of 1%–1.5%, and 2%–10% at select merchants.

You won’t get charged any extra fees for yearly expenses or late charges—and the credit card does come with a fairly standard rate: 18.24% - 32.24% Variable APR.

Interested in other similar cards? Check out our recent review of the top Guaranteed Approval Credit Cards With No Deposit.

For more information, read our Petal 2 Visa Credit Card review.

	Name	Score	Visit	Annual Fee	Regular APR	Intro Offer	Credit Needed	Disclaimer
	Capital One Platinum	7.0	Visitcapitalone.com	$0	30.74% (Variable)	N/A	Fair (580–689)

For a secured card, Capital One Platinum Secured has a pretty low minimum deposit, starting from just $49—not bad for those on a budget.

And if you really are set on budgeting—the card starts with a $200 credit limit, with the opportunity to increase it to $1,000 if you fancy splurging from time to time.

To make your life easier, you can track your score for free by using their CreditWise feature and set up Auto-Pay so you never miss a payment.

For more information, read our Capital One Platinum Card review.

	Name	Score	Visit	Annual Fee	Regular APR	Intro Offer	Credit Needed	Disclaimer
	Chime Credit Builder Visa	7.0	Visitchime.com	$0	0%	N/A	Bad to fair (300–600)

Learn more

As the name suggests, the Secured Chime Credit Builder Visa® Credit Card is aimed at building credit—and you won’t need to reveal your credit score to get set up.

There are no interest or annual fees. To get started, all you need to do is deposit $200 deposit into your checking account.

Once you’ve got your hands on the card, you can go big or go home (literally)—with a credit limit that starts from $300 and goes up to $10k.

For more information, read our Chime Credit Card review.

	Name	Score	Visit	Annual Fee	Regular APR	Intro Offer	Credit Needed	Disclaimer
	Tomo Credit Card	7.6	Visittomocredit.com	$0	0%	N/A	Bad to fair (300–600)

Learn more

For all you credit card newbies—Tomo is the best first card to build credit as there are no APR fees or annual fees to catch you off guard.

Tomo also has a bunch of other handy features, like automatic payments and discounts on major retailers. You’ll also get a 1% cash back on every purchase you make.

Tomo is pretty relaxed with their requirements—as you don't need a credit score or even US citizenship to sign up. All you’ll need to do is link Tomo to an existing bank account so you can make your weekly payments.

For more information, read our Tomo Credit Card review.

	Name	Score	Visit	Annual Fee	Regular APR	Intro Offer	Credit Needed	Disclaimer
	Discover it Student Chrome	9.2	Visitdiscover.com	$0	18.24% - 27.24% Variable APR	Cashback match	Average (630–689)

Learn more

Being a student can be hard—all the time spent doing essays, meeting deadlines, and partying five days a week—but Discover it® Student Chrome makes student life a little more enjoyable with a bunch of rewards and cash backs.

This includes a 2% cash back at restaurants and gas stations, plus a 1% cashback on all other purchases.

Discover it® Student Chrome doesn’t charge any annual fees and no APR for the first six months—after which it goes up to 16.74%–25.74%.

	Name	Score	Visit	Annual Fee	Regular APR	Intro Offer	Credit Needed	Disclaimer
	Discover it Secured Credit Card	7.6	Visitdiscover.com	$0	28.24% Variable APR	N/A	Poor (300–629)

Learn more

Who would say no to being rewarded for spending money? The Discover it® Secured Credit Card has a 2% cash back on gas and restaurants—plus a 1% cashback on everything else.

The card comes with a 28.24% Variable APR interest rate. You’ll just need to cough up a $200 deposit and you’re ready to start building credit.

You don’t need a minimum credit score to apply—and Discover will report all your payments to the three major credit bureaus.

More credit builders for consideration:

• Avant Credit Card Review

• Mission Lane Credit Card Review

• Reflex Platinum Mastercard Review

• Self Visa Credit Card Review

Yes, a secured card can build credit just as well as a regular credit card, as long as you use it responsibly and consistently.

In some cases, it can even be easier to build credit with a secured card as the entry requirements are less restrictive for those with poor credit (requiring only a security deposit instead of a credit score check).

But no matter what the card, you’ll only be able to improve your credit score if you practice positive financial habits, such as making payments on time, staying out of debt, and keeping that credit utilization low.

Ready to get started? Applying for a credit card is easy, just follow these steps:

1. Do your research: Look for cards with low fees and interest rates, as well as those that report to all three credit bureaus to help you build credit over time.

2. Read the fine print: Consider the deposit amount required, credit limit, and any additional benefits (or drawbacks) offered by the card issuer to find the right match for you.

3. Provide your details: You’ll typically need to provide personal information such as your name, address and Social Security number, and proof of income. You’ll also need to have the cash deposit ready to secure the card.

4. Apply for the secured credit card: Follow the instructions provided by the card issuer and complete the application with the right information (it never hurts to double-check).

5. Wait for approval: If all your details stack up, the card issuer will review your application and credit history and tell you if you’ve been approved within minutes.

6. Activate your card: Once you’re approved, you’ll get your new secured credit card in seven to ten working days. But you’ll need to activate it before you can start spending (just check the card issuer’s site for instructions).

7. Use the card responsibly: You’ve got your hands on a credit card—so make the most out of it. Start demonstrating responsible credit usage and watch your credit score start to rise up.

Applying for a secured credit card is just the beginning, though. To truly conquer the credit mountain, you’ve got to monitor your credit report and score (try using Credit Karma for a free report).

Keep a close eye on your credit behavior and make changes when necessary—maybe you need to reduce your credit utilization or pay your bills on time more consistently.

Whatever it is, stay on top of it—and you’ll start improving your credit score in no time.

Struggling to make payments? Try our free budget calculator to stay on top of your finances.

If you’re still weighing up your options, here are some pros and cons to keep in mind when you’re considering a secured credit card—

We all know someone who wakes up at 5 a.m. to go running, has a monster green smoothie, and finishes off with a yoga session. (They usually also have an excellent credit score.)

Latching onto their good habits and becoming an authorized user is a quick way to boost your credit score.

All you need to do is sign up as an authorized user of another cardholder (preferably a close friend or family member with good credit). This way, their balances and payment history will also get added to your credit reports.

When the main cardholder shows good credit behavior, it’ll reflect on you too.

But this works both ways—if the primary cardholder starts making late payments or their account balance gets too high, you and your credit score will go down with them.

Before signing up, make sure the main cardholder is trustworthy and has a solid history with minimal credit card delinquencies.

Most people are pretty cautious about loans, especially when you’re trying to build credit.

Don’t get me wrong, on-time loan repayments can boost your score—but that’ll come tumbling back down if you make any late or missed payments.

Moral of the story—only take a credit-builder loan if you’re certain you can make on-time payments.

As the name suggests, these loans are designed to improve your credit. After applying, the lender will keep hold of your funds in a separate savings account until you pay off the full amount in monthly payments.

Since you don’t get your loan upfront, this isn’t the best choice if you need some emergency cash. You should also take your time to compare lenders, make sure they report to the credit bureaus and watch out for any high-interest rates.

We’ve said it once and we’ll say it again—paying bills on time is one of the most important factors in building and maintaining a good credit score.

If you’re late to payday or miss it altogether, your credit score will be in trouble.

Imagine if you tried to bag an A* at school but kept showing up late or missing classes—your teachers will be less than impressed and they’re the ones handing out the scorecards.

The same goes here—the credit bureaus decide your score, so you need to impress them with responsible credit behavior.

Even if you don’t have any credit cards, paying bills such as rent, utilities, and your cell phone on time can help you establish a credit history.

And if you’re the forgetful type, many banks and credit card issuers will let you set up automatic payments for bills or credit card balances, so you never miss a beat.

Credit Card Payoff Template for Excel

Lay out your credit card debt with the minimum payments and interest to see how long it will take to pay off!

What you will get:

• Interactive dashboard

• Customizable to your needs

• Stay on track with charts and graphs

• Suitable for up to 16 or 32 debts!

Get this template

If you’re lucky enough to have a landlord who wants to help you out—you could ask them to report your monthly rent payments to the credit bureaus.

You’ll be able to demonstrate how responsible you are at paying up on time—which will help build your credit score.

If your landlord suffers from sudden episodes of blindness every time you show him your wall mold—you might want to look elsewhere. Companies like RentTrack and Rent Reporters are there to report your rent payments for you.

With promises of cashback and high credit limits, it can be tempting to open a new card. But keep in mind that too many credit applications can have a negative effect on your score.

It’s just a minor factor that affects 10% of your credit, but adding a new credit account to your portfolio can cause a slight dip in your score.

This happens when the creditor makes an inquiry on your credit report to open your account.

Try to focus on the credit cards you currently have and use your credit-building tips to start seeing those positive changes.

Still thinking about a new card? Below are our recommendations if you've got fair credit and want to build it up. Don't like these options? Click here for the full list of our credit card offers.

Upgrade Cash Rewards Visa® 4.4	Capital One QuicksilverOne Cash Rewards Credit Card 3.6	Capital One Platinum Credit Card 3.5
Annual fee $0	Annual fee $39	Annual fee $0
Rewards rate 1.5% Earn 1.5% unlimited cash back on card purchases every time you make a payment.	Rewards 1.5%–5% 1.5% cash back on every purchase, every day. 5% cash back on hotels and rental cars booked through Capital One Travel (terms apply).	Rewards N/A
Intro offer $200 Earn a $200 bonus after you open a Rewards Checking account and make 3 debit card transactions within the first 60 days.	Intro Offer N/A	Intro offer N/A
Learn more	Learn more	Learn more