Credit Cards to Build Credit

Your credit score is based on your credit history, which includes the length of time you’ve had credit and how you manage your credit. Opening a credit card account can help you establish credit if you don’t have any, and using the card responsibly by paying bills on time can help your credit score. ²

A new credit card account usually needs to be open and used for at least six months before it’s considered for your credit score by the major credit bureaus. To build credit with responsible use, make sure your credit utilization remains low, don’t charge above your credit limit, and make sure you pay every statement on time.

Yes, any credit line or type of credit card can help you build credit, if used responsibly, by influencing the factors that affect your credit score. But you’re responsible for managing your credit well if you want a good credit score. If you spend more on it than you repay, you’ll accumulate credit card debt which can contribute to poor credit and a bad credit history.

If a credit card issuer reports all account users (the primary cardholder and any authorized users) to the credit bureaus, the credit account activity can contribute to the authorized user’s credit. If the primary cardholder uses their card responsibly, like paying their bill on time and keeping a low credit utilization, this can contribute positively to the authorized user’s credit. But be aware of the risks involved too. An authorized user’s credit could be negatively impacted if the primary account holder makes late payments or maintains a high balance on the account. Other credit card issuers may allow authorized users but not report both users to the credit bureaus. In that case, the credit activity will not contribute to the authorized user’s credit.

You only need one credit card account to start building credit. ² By making on-time payments and keeping your balance low, you can demonstrate responsible use of your credit card account and help improve your credit score.

Building credit and achieving a high credit score can help you meet both near- and long-term financial goals. A good credit score may help you qualify for credit cards with exceptional rewards and a lower interest rate, or even help with renting an apartment or landing a job if your credit history is reviewed during the application process. A high credit score may also help you secure better terms and lower interest rates on other types of loans in the future, like a mortgage or auto loan. Better terms could end up saving you money over the duration of the loan.