A credit card is a great financial tool that can provide you with excellent opportunities and crucial flexibility. Still, when it comes to taking out a credit card, many people ask the same thing: How does a credit card affect your credit score? The truth is that you determine how a credit card impacts your credit score.
When you partner with a respected financial institution like Camino Federal Credit Union to take out a credit card and use it responsibly, it can affect it positively if you manage it well. At Camino, we have been serving Montebello since 1941 with great rates, loan terms, and attentive customer service to help members build a bright financial future.
If you are curious about how a credit card will impact your credit score, you came to the right place. Read our blog to learn how a credit card can affect your credit score and how to ensure it has a positive impact.
How Does a Credit Card Affect Your Credit Score?
Partnering with a respected financial institution like Camino to take out a credit card could be a great way to improve or build your credit. In fact, your credit card payment history accounts for 35% of your FICO Score.
At the end of the day, you control how a credit card impacts your credit score. Firstly, applying for any form of credit could lower your credit score temporarily, but it will go up again after you have started making payments.
When you use a credit card, you must manage it responsibly to ensure it has a positive effect on your credit. To ensure it affects your credit score positively, we advise:
- Using your card for small amounts of everyday spending
- Not withdrawing cash with it
- Avoid going over the credit limit
- Setting up a direct debit to your credit card account so you never miss a payment
- Scheduling direct debit on your payday
- Making full payments each month
- Making payments on time each month
- Avoiding taking out more credit while your score is low
- Avoiding filing several credit card applications in a short period
- Keeping your credit cards open for a period of time with positive payment history
If you make timely payments, use the card responsibly, maintain a low utilization ratio, and avoid maxing it out, a credit card will have a positive impact on your credit score and instill you with financial confidence. A credit card can benefit your credit score by:
- Adding hard inquiries to your credit file
- Increasing your credit mix
- Improving your credit utilization rate
- Showing you can make large, timely payments
By showing that you can responsibly manage a credit agreement, you will build or improve your credit score and eventually qualify for loans and credit cards with better rates.
Apply For a Credit Card Today
How does a credit card affect your credit score? A credit card can be a great way to build or improve your credit and put yourself in the driver’s seat of your finances and on track to a bright financial future. With a credit card from a reputable institution like Camino Federal Credit Union, you enjoy a great credit limit, no annual fees, low variable rates, platinum perks, and valuable rewards.
To learn more, visit us at caminofcu.org, call us at 800-835-3400, or apply on our Camino Visa Platinum with Rewards card page.