How to use a credit card to improve your credit score

Responsible use of credit cards can help you improve your credit score. Build a borrowing history by making small regular credit card transactions and paying your bill in full each month. This will show lenders that you can handle credit responsibly.  

4 min read
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good credit score is important. The higher your score, the more likely it is that your application for a credit card, mortgage or personal loan will be accepted. 

If you have never borrowed money before, lenders won't be able to see how you handle your finances, and you may be less likely to be accepted for credit. 

Responsible use of a credit card is a good way to start building a credit history. In theory, you can use any credit card to boost your credit rating, but credit building credit cards are specifically designed for this purpose, as you’re more likely to be accepted if you have thin or low credit 

Whatever type of card you get, it’s important to understand how a credit card can affect your score before you start spending on the card.  

How can I improve my credit score with a credit card? 

A credit card helps you build a borrowing history. This can increase your chances of being accepted for credit – and securing a better deal - in the future. 

Having a mix of credit accounts shows you can manage different types of borrowing. Using a credit card alongside an overdraft or loan, and having household bills in your name, will show lenders you can manage your finances well.  

How can I get a first credit card?  

One issue many people have is getting approved for their first credit card. Without a credit history, lenders can’t see how you have handled debt repayments in the past. 

You might also have trouble getting approved for a credit card if you have: 

  • a record of missed debt or bill payments 

  • been declared bankrupt in the past 

There is a special type of credit card for people in this situation: a credit building credit card. These are much easier to get than mainstream credit cards. 

What is a credit building credit card? 

A credit building credit card is designed to help people who need to build up a credit history or get their credit rating back on track after past financial difficulties. 

A credit building credit card has the following features: 

  • Low credit limit 

This type of card is also known as a credit card for bad credit. 

You may be able to get one from your bank or a credit card company that specialises in credit building cards. 

How to use a credit card to build credit? 

Whether you use a mainstream credit card or credit builder credit card, it’s important to use it in a certain way to improve your credit score.  

Here’s what you should do: 

  • Make regular small transactions on your credit card each month 

  • Pay off your balance in full each month 

  • Set up a Direct Debit to pay of your balance each month, and reduce the chances of you missing a payment 

  • Use less than 30% of your credit limit to show you're not heavily reliant on credit 

It’s important you pay off your card in full each month, as you then won’t have to pay any interest. 

If you can’t afford to repay the full balance one month, make sure you make at least the minimum payment. This will be shown on your credit card statement. If you don’t make at least the minimum payment, you could be charged a late payment fee, and your credit score could fall.  

Should I get a credit card to build credit? 

You should only use a credit card to build credit if you are confident that you can, and will, repay the money you borrow. Using a credit card responsibly can improve your score, not doing so could harm it.  

Here are several things you should do your best to avoid if you have a credit builder card: 

  • Borrowing close to your credit limit 

  • Missing monthly credit card payments 

  • Only paying the minimum payment for several months in a row  

  • Withdrawing cash from the ATM 

Doing any of the above could potentially lower your credit score. 

Other ways to improve your credit score 

Doing the following alongside using a credit card will help build your UK credit score: 

  • Getting a pay-monthly mobile contract 

  • Having your name on a household bill 

  • Holding a bank account 

You can read more about quick ways to build your credit score in our guide.

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Disclaimer: All information and links are correct at the time of publishing.

Emma Lunn, Personal Finance Writer

Emma Lunn

Personal Finance Writer

Emma has been writing about personal finance for 20 years. She's passionate about helping people make better money decisions so they have the time and money to focus on the things they love. For her, that's racket sports, hiking, and travel.