How to build credit with a credit card?

visa card on white computer keyboard

What is your credit score? Your credit history influences your ability to take out a loan, rent an apartment, obtain low cost insurance and get a job. Building your credit score is a task that you should take seriously.

But you shouldn’t start paying interest to get a credit score. In this guide, we explain how to use a single credit card to build a positive credit report.

Step One: Pull Your Credit Report

Every American can access their free credit report from the three major credit reporting bureaus at is the only website where you can get your free credit reports.

Even if you have not used credit, you may have a credit report. This happens if you have negative information such as a late payment on a cell phone, or a delinquent medical bill.

The purpose of checking your credit report is to see if you have any delinquent bills. You cannot obtain even the most basic credit cards unless you clear delinquent bills.

This is also a great chance to see if you’ve been the victim of identity theft.

If you’re curious, you can also get three credit scores (not just the raw report) from This site can help you understand how banks interpret your credit report.

Step Two: Apply for a credit card

If you haven’t established credit history, you can still get a credit card. Banks offer secured credit cards for customers starting their credit history. Secured cards can also serve customers who want to rebuild bad credit.

Secured credit cards require you to pay a deposit that backs the line of credit that banks extend. Some secured credit cards also have annual fees, but the best cards waive those fees.

Look for a secured card with a low deposit, no annual fees, and a path to higher credit limits.

Step Three: Start Using The Card

Having a credit card starts your credit history, but to build your credit, you need to use your credit card. You DO NOT have to pay interest to build credit, but you need to use the card. Using your credit card demonstrates that you can use credit wisely.

Creating a track record of paying your bills ON TIME is the single most important factor in building credit. If you pay your bill on time, every month you will start to build a good credit score.

However, it’s easy to make credit mistakes that can cost you big in the long run. In addition to paying your bill on time, consider these important guardrails.

  • Always pay your bill on time.
  • Never use more than 15% of your total credit limit. If you start with a $200 credit limit, never spend more than $30 on your card before you pay it off. Credit utilization (the amount of credit you use relative to your available credit matters).
  • Pay your bill in full each month. This way, you won’t get caught in high interest debt traps.

Paying your bill on time and in full is a practice that will keep you out of high interest debt. Don’t spend money that you can’t afford to pay back.

Step Four: Monitor your credit

Now that you have a credit card, you will want to start monitoring your credit score on a regular basis. Some secured credit cards (Like the Discover It® Secured Credit Card and the Secured Mastercard from Capital One) offer credit monitoring with their bills.

You can also find free credit monitoring services from Credit Sesame and Credit Karma. (These services allow you to keep an eye on your credit score. You should not expect your score to skyrocket overnight. But over the course of a few months, you should see a steady increase.

If your score does not increase, you may have paid your bill late or taken out too much credit. You may also see negative information (such as late payments on other bills) taking a bite out of your score. Take action to establish a solid credit score early. Don’t dig yourself into a hole with poor management.

Step Five: Upgrade your card

After 12-18 months of excellent credit behavior, you will start to receive offers for new credit.

When this happens, ask your bank to switch your secured credit card to an unsecured card, so you can get your deposit back. Keep the card open (as long as you don’t have any fees), so you can establish a long credit history.

After that, you can open a rewards credit card. You can use the rewards credit card to get cashback or points on money that you spend. However, these cards have pitfalls. They will tempt you to spend beyond your means.

MUST READ: How to Earn $100 in a Day? Quick Cash Guide

To stay out of credit card debt, continue the practice of paying your credit card on time and in full.

Step Six: Automate Excellence

If credit card rewards don’t excite you, set up autopay on one bill every month from your preferred credit card. This will allow you to continue a record of credit excellence. Automating the process makes it effortless for you to maintain excellent credit for the future.

Autopay allows people don’t prefer to use credit to maintain excellent scores.

Final Thoughts

Building and maintaining excellent credit does not obsessive credit monitoring or paying high interest. Anyone can create an excellent credit profile with judicious use of a single credit card. Start building your credit with a secured credit card today, so you have even greater opportunity tomorrow.