How to Use Your Credit Cards to Rebuild Your Credit?

If like most people, you have been overspending and not keeping tight control over your finances, you may likely have missed making loan repayments or credit card payments and ended up damaging your credit. With a poor credit score, you will find it more difficult to access credit and be charged more interest. However, if you are interested in repairing your credit score, you can use your credit cards to help you do that by learning to use them responsibly. Some practical tips on how to maintain a good credit score:

Pay Your Credit Card Dues on Time 

Your credit score is essentially a measure of you well you can manage debt. One of the most vital aspects credit agencies monitor is your record of making the payment on time and to what extent you pay off your dues. With FICO giving as much as 35% weight to timely payments to your credit score, paying on time is among the most effective things you can do to build credit.

Treat Credit Cards Just Like Debit Cards

The main reason why people tend to overspend using credit cards is that there is no immediate impact on your bank balance. Old-timers will recall the coupon system used by Fingerhut as among the first retail credit systems designed to encourage customers to buy and pay over a long period. Make it a point to use your credit card only for an amount that you know that you can repay on the due date mentioned on the card statement. Remember, any balance you carry over attracts a very high rate of interest that can be a substantial drain on your resources.

Keep Your Credit Utilization Low

Even if your credit card has a healthy credit limit, it is not a good idea to max it out because it sends out a signal to the credit monitoring agencies that your finances are overextended. Since FICO assigns a 30% weight to the credit utilization ratio, the lower the balance you keep on your credit cards, the better it is for building your credit. Typically, you should aim to keep the exposure to less than 30%, though according to, even anything above 5% can start hurting your credit score.

Keep Your Credit Cards Active

FICO gives a 15% weight to the length of the card usage. This makes it not only important to start using credit cards as soon as possible but also to use them regularly and responsibly. Do not get tempted by promotional offers and sign up on new credit cards just for the bonus and then close them as it sends out wrong signals to the credit agencies. Rather keep as many cards as you can manage well and shuffle them so that they are all in use regularly.


Credit cards are important for modern-day living; however, it is vital to use them responsibly. Missing payments, keeping high balances, making late payments, etc. can ruin your credit score making future access to credit difficult and more expensive. With careful use, customers can, however, ensure that their credit score is repaired over time.

Author’s bio:

Walter Moore is a blogger and digital marketing expert. He is quite experienced in the field of IT & has written numerous articles.