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Top Credit Card Tips to Improve Your Credit Score

Simply stated, credit is financial trustworthiness. In essence, your credit score is your spending and borrowing history and it shows lenders how dependable you are to pay back a loan. Lenders will often access your credit history and use your credit rating to determine your credit worthiness.

Establishing credit is an important step for many of your current and future financial pursuits. Whether you’re thinking about purchasing your first car, renting an apartment, buying a house or applying for a loan, your credit score plays a crucial role in determining the loan amount available and interest rate. One of the most common ways to begin to build strong credit is to open a credit card and use it wisely.

Learn important credit card information to build a strong credit score. There are a number of easy-to-manage solutions to building and maintaining the credit score you want. Avoid common pitfalls with the help of the following credit card tips:

1. Make on time credit card payments – Late credit card payments are a surefire way to lower your credit score. By making credit card payments on time, or even early each month, you will guard against unwanted increases in your Annuals Percentage Rate (APR) and the possibility of negatively impacting your credit rating.

2. Pay more than your minimum payment due each month – If you’re not able to pay off your credit card balance in full each month, make sure that you are paying more than your minimum payment. Potential lenders like to see you can afford more than the minimum payments when making decisions about your credit worthiness and future loan activity.

3. Try not to spend up to your credit limit – Creditors also like to see that while you may have a large spending limit, you are not using the entire available balance. When calculating your score, creditors often take your current debt to income ratio into account, so be cognizant that you’re not spending to your limit.

4. Follow the 20/10 rule – Avoid borrowing more than 20 percent of your annual net income and keep your non-mortgage loan payments less than 10 percent of your monthly net income. Following the 20/10 rule will help you avoid borrowing more than you can comfortably repay.

5. Don’t open too many credit cards too quickly – While building your credit does involve opening a line of credit, be cautious of opening too many cards in too short a time period. The best way to build credit is to build it gradually and naturally over time, so while having a few lines of credit can help you in the long run, be aware that having too many credit cards open at once can also hurt your credit rating because lenders see that you already have the potential to borrow more than you may be able to comfortably afford.

6. Review your credit report regularly – Many people believe that checking your annual credit report impacts your credit score, which isn’t true. There is no negative impact on your credit score when you make an annual request for a copy of your credit report from any of the three major credit bureaus. However, when banks check your credit to evaluate a loan application or line of credit, it is called a credit inquiry and too many of these inquiries can actually lower your score. So be mindful of the amount of inquiries being made and aware of when/if your credit score fluctuates because of them or various other reasons (late payments, unresolved billing issues, etc.) in order to remedy the issues as soon as possible.

By following these helpful credit card tips, you can build good credit all while improving your financial trustworthiness and make smarter decisions with your money. These same tips can be applied to Canadian credit cards, or credit cards from any country, for that matter.

This is a guest post contributed by Micah Moon.



  1. I’m curious. Let’s say that my current credit card balance was $200. Do credit card companies/your credit score prefer it if you only pay off the balance partially (say $190) and carry a small balance over to the next month? Or, is it better to pay it off in full?

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