Credit cards can be a great way to build credit, but it’s important to use them responsibly. Paying your bills on time and keeping your balance low will help you increase your score.
Is it worth getting a credit builder card?
The best cards report to all three credit bureaus and offer free monthly scores so you can monitor your progress. They also often come with other useful benefits, such as travel protections or insurance for your purchases.
Secured credit building credit cards are designed for people with poor credit, and they allow you to build your credit by spending within your credit limit and paying your bill on time. These cards typically require a refundable security deposit, which can range from $300 to $5,000.
Applying for multiple new accounts at once can temporarily damage your credit score, so it’s a good idea to space out your applications. Be sure to make a single application at a time, and don’t apply for more than one card in a few months.
Becoming an authorized user on someone else’s credit card is another helpful strategy for building credit. It’s especially beneficial for young people, who can piggyback off a parent or partner’s credit history.
It’s important to understand that adding yourself as an authorized user on a card means the primary cardholder is responsible for your actions. If the owner of the card has negative behaviors or is unreliable, they could harm your score. To avoid that, ask the primary cardholder whether his or her payment activity is reported to the credit bureaus before you add yourself as an authorized user.