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Your Credit Card Can Help Your Credit Score

By VerityCU July 16, 2021 Financial education

For some people, “credit card” is an evil term, bringing to mind high interest rates and skyrocketing debt. But, having a credit card can be incredibly beneficial to your overall financial life. Not only can it be a safety net for unexpected expenses, or help you earn cash back on purchases, it can help you improve your credit score!

In this article we will talk about what responsible use of your credit card looks like, and how to use it properly to raise your credit score.

The three main categories affecting your credit score are payment history, amount of credit owed, and length of credit history. (There are some other factors at play too, which you can learn about in our “How Credit Scores Work” article).

Your payment history records how often you make payments and if you make them on time. With Verity’s credit cards always having a due date of the 18th of each month, as long as you make a payment on or before that date, your credit score will reflect positively. The payment each month does not need to be the entire balance— if you pay the minimum due, then the card will be reported as being caught up on payments.

The amount of credit owed does reflect both positively and negatively, depending on what your credit report has listed. For credit cards, it is a standard rule to try and keep your utilization, how much of the credit you use, under 30% of the credit limit. For example, if your limit is $1,000 then you should try to keep the balance that rolls over to the next month at $300 or less. Which also means if you owe $450, you will want to make a payment of $150 or more to make sure you stay under 30% used.

The length of your credit history is very important, especially when it comes to graduating to different loans, like a vehicle loan or mortgage. The length of time you’ve had your credit card (which is really a loan) shows your ability to successfully manage a line responsibly. You want to make sure to keep a close eye on the credit card you opened in the beginning of your credit journey because if it’s not being used, it can be closed due to inactivity. Verify with the financial institution to see their policy on how long the card needs to be inactive for it to close.

Shopping for a credit card can be tough, as each card comes with its own benefits and rates, so you want to make sure you apply for a card that suits your spending habits. Verity offers a rewards credit card, a low-interest card, and a business credit card. Explore your options—and apply—on our credit card page.


Contributed by Anthony Rice, member consultant II at Greenwood's Verity branch