Financial Advice

Five Tips for Improving Your Credit Score

Almost everyone has a credit card, but if you’re not using them wisely, you might be doing more harm than good. Are you using your credit cards wisely? These five tips are essential if you’re looking to improve your credit score or maintain good credit.

Published Jan 18, 2017 | Updated May 8, 2024
5 Tips for Improving Your Credit Score

Credit cards can be a great tool for streamlining your everyday finances. Unfortunately, many people tend to misuse them. You don’t have to swear off credit cards to stay on pace to meet your savings goals. You just have to learn how to use credit cards responsibly. These five tips are essential for you if you’re looking to learn how to improve your credit score.

1. Understand How Credit Cards Work

The first step to being responsible is to know the details about how your credit card and its particular policies work. The more knowledgeable you are, the better decisions you will make.

Every credit card is a little bit different. Some offer 0% introductory interest rates while others start charging you right away. Some offer airline points while others do not. Some penalize you for late payments while others might allow you to miss one payment without penalty.

You should know what your interest rate is, how your rate can affect your balance if you don’t pay on time, and how to check your credit score. Essentially, the more you know about how to improve your credit score, the better.

2. Pay Your Credit Card in Full Every Month

Paying your credit card in full every month keeps you from owing interest. Any time you don’t pay off your credit card in full, you’re charged interest on the amount that remains. Some people incorrectly assume they should leave a balance on their credit card in order to improve their credit score, but that’s not true. In fact, the best thing you can do for your credit score is to pay off your credit card on time, every time. Your payment history makes up 35% of your credit score, so the more responsible you are, the higher your credit score will be.

3. Don’t Rely On Credits Cards More Than Income

If you are relying on a credit card to help you with your monthly bills and emergencies, you could be causing more harm than good. A credit card is merely a tool that you can use so you don’t have to carry around cash. It also helps you to keep track of purchases and even protect your purchases in case of fraud. And some credit cards offer other perks. The more familiar you are with your card, the more it can help you. However if you start to rely on your card too much to pay for extras that you can’t afford, you will be at risk of going into debt and staying there.

4. Keep Your Credit Cards Safe

Visit any UFCU location for a free credit review. We’ll review your personal credit score, answer any questions you may have, and help you find your individual path to financial success.

It is important that you understand how to avoid credit card fraud and always keep your credit cards safe. Having a credit card with fraud protection can give you peace of mind. Always be sure to keep your card information private. Don’t use websites that don’t appear to be legitimate, and avoid logging into your credit card accounts when you’re in a public place.

5. Use Credit Cards to Your Advantage

Do the research and choose the right credit card for you. That way you can take advantage of all the perks like earning rewards, getting a lower interest rate, and paying off debt faster when you can. Also stay informed about your credit score. You can order a credit report on your own, or ask a representative at your financial institution to help you. Depending on your situation you might be eligible to receive a free credit check.

Using Credit Wisely Can Lead to Financial Success

Simply having a credit card and using it is not enough to necessarily benefit you. But using your credit cards properly can help you build a positive credit history and improve your credit score. Done right, credit cards can help keep you covered if you have an emergency and even help you budget if you track and learn from your spending patterns. As long as you use your credit cards wisely, they can be a great tool to help you achieve financial success.