How to Improve Your Credit Score With Credit Cards

Our experts answer readers’ credit card questions and write unbiased product reviews (here’s how we assess credit cards). In some cases, we receive a commission from our partners; however, our opinions are our own. Terms apply to offers listed on this page.

• If you’re looking to build and improve your credit score, opening and using a credit card could be a great strategy, but only if you’re able to pay it off each month.
• Credit scores are calculated using a variety of factors, including your payment history, amounts owed, length of credit history, new credit, and credit mix.
• Credit cards are convenient tools for improving your credit score if you use them strategically, e.g., if you manage your credit utilization ratio and consistently make payments on time.



• Read Insider’s guide to the best starter credit cards.

A good credit score isn’t merely something to brag about; it can help you secure a favorable interest rate when you’re applying for a mortgage, auto loan, or new credit card.

There are numerous ways to increase your credit score, including paying your bills on time and taking out multiple lines of credit. If you’re working to boost your score, the most efficient plan of action may be to use one or more credit cards responsibly. One or two cards can help you achieve multiple goals and gradually improve your credit score.

We’re focused here on the rewards and perks that come with each card. These cards won’t be worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.

How credit scores are calculated

FICO and VantageScore are just a couple of examples of credit-scoring models. Your exact score will depend on which model you’re looking at, and each model places a different amount of emphasis on the factors that make up your score. The most common model is probably FICO, with scores ranging from 300 to 850. Here’s how those numbers break down:

• Under 580: Poor

• 580-669: Fair

• 670-739: Good

• 740-799: very good

• 800+: Exceptional


How are credit scores calculated? FICO assesses the following factors to compute your score:

• Payment history: 35%

• Amounts owed: 30%

• Length of credit history: 15%

• New credit/inquiries: 10%

• Credit mix: 10%


If you’re wondering how you’re doing in each area, you can get a free credit report each year from each of the three major credit bureaus through AnnualCreditReport.com. Due to the pandemic, you can actually get a free credit report each week through the end of 2023.

Another option is to subscribe to one of the best credit monitoring services. Some of these are free, while others charge a modest fee and include features like real-time alerts from all three credit bureaus, dark web monitoring, social media account protection, and malware protection. 

Use credit cards to improve your credit score

Here are five ways that you can build credit with a credit card. Responsible card use can positively impact the elements that determine your credit score, from payment history to your length of credit history.

1. Make your monthly credit card payments on time

Paying all your bills by their due dates, including your credit card bill, is the easiest way to fix your credit score. This task falls under the “payment history” category, which accounts for 35% of your credit score.

Late payments of 30 days or more count as a delinquency on your credit report, and can stay on your credit report for seven years. However, after proving for an extended period of time that you can make payments promptly, you can always try calling the credit card company to ask if it can remove the demerit from your report, especially if you can give a legitimate reason for having missed the payment. 

2. Keep a small balance to lower your credit utilization ratio

Your credit utilization ratio is the relationship between how much credit you can use versus how much credit you are using. It’s the balance you carry on your credit cards in relation to your credit spending limit across all credit card accounts you have open.

This falls under the “amount owed” category, which makes up 30% of your FICO credit score. The less you owe, or the lower your credit utilization ratio is, the better. Avoid charging more to the card than you can handle — you should pay the total statement balance every month. 

3. Increase your spending limit to lower your credit utilization ratio

What’s the spending limit on your credit card? $5,000? $15,000? Maybe it’s somewhere in between.

When it comes to building credit, this spending limit can be much more powerful than you’d think. If you have a high spending limit and low balance, your credit utilization ratio will be lower than if you have a low limit and a low balance. For example, if you have a balance of $1,000 on a card with a $6,000 limit, your utilization ratio is 16.6%. A balance of $1,000 on a card with a $12,000 limit comes to a ratio of 8.3%. 

How do you increase your spending limit? You should be able to call the credit card company customer service number to request the change. When I made this call, it took less than 10 minutes. You can’t guarantee that they’ll say yes, but they won’t penalize you for asking.

If you think raising your spending limit will tempt you to overspend, you should refrain from increasing the limit. Not only will this make you accumulate debt, but your credit score could also drop if you can’t afford to make payments to keep the balance low.

4. Keep the same card open for a long time

This strategy falls under “length of credit history,” which makes up 15% of your score. If you’re tired of paying off your credit card, you may be tempted to cancel the card altogether. This could be the right move for you, but if the ultimate goal is to build credit, you may want to reconsider.

Lenders want to see that you can use credit responsibly for a long period of time. The longer you have a line of credit and use it responsibly, the better it looks. Especially if a card has no annual fee, consider keeping it open — you can put it in a sock drawer or somewhere else out of sight. You should still use it once every six months or so to make a small purchase (and pay it off), so the credit card issuer doesn’t assume your account is inactive and make the decision to close it.

5. Negotiate a lower APR on your card

If you find yourself in a situation where you can’t pay off the total balance on your card every month, your balance accrues interest — unless you have an introductory APR offer. If the annual percentage rate (APR) on your card goes down, you’ll pay less in interest. This could make it easier for you to pay off your card and/or make payments on time, thus improving your credit score.

I negotiated my APR recently. My income has increased since I applied for the card a few years ago, so I called a customer service agent to ask if this factor could allow me to qualify for a lower APR. Within five minutes, my APR dropped by 3%. It never hurts to call and request a lower rate.

Best credit cards for improving your credit score

Secured credit cards

Secured credit cards are aimed at users with limited credit, no credit, or bad credit, and you can use them to improve your score. Secured cards require users to make a deposit when they’re approved. This deposit makes it less risky for an issuer to do business with someone who has a poor credit history.

These cards almost never come with welcome bonuses or intro APR offers, but the best secured credit cards actually earn rewards like cash back or travel points for spending. Here are a few of the top options:

Once you’ve made on-time payments for a specified period (normally at least six months), most banks will automatically consider you for a higher credit line. This means good things for your credit utilization ratio.

Later, after a longer period of responsible use, the issue might allow you to “graduate” to an unsecured credit card. At that point, you can get your security deposit back.

Credit cards for average credit

If you’ve already got a fair credit score (a FICO score between 580 and 669), opening one of the best credit cards for average credit scores could be a better strategy. These cards aren’t secured by a deposit so you won’t have to worry about tying up your cash to get a credit line. That said, you don’t typically find welcome bonus offers on these types of cards, either. 

Some of the top options include:

Credit cards for good credit

You’ll probably need a credit score of at least 670 to be approved for cards aimed at folks with good credit or better. That makes these card ideal for people who already have a good score but are aiming for a very good or exceptional score.

Some top examples include:

Some of these cards come with welcome bonuses and intro 0% APR offers on purchases, balance transfers, or both. For example, both the Chase Freedom Flex℠ and Chase Freedom Unlimited® have welcome offers, and new cardholders qualify for a 0% intro APR on purchases and balance transfers for the first 15 months, then a 19.49% – 28.24% Variable APR. 

Alternatively, one of the best balance transfer credit cards, the Citi® Double Cash Card, offers a 0% intro APR for 18 months from date of first transfer for balance transfers made within 4 months of account opening followed by a 18.49% – 28.49% Variable APR.

Student credit cards

If you’re a student with a limited credit history, there are still credit cards you can get approved for that have strong benefits and earning rates. Some of the best student credit cards on the market right now include:

There are many incentives for using a credit card, like sign-up bonuses, rewards programs, and convenience. However, if your main objective is to increase your credit score, these types of credit cards can help you reach that goal.