Credit cards are a great way to manage your financial needs. But did you know that by using your credit card, you can actually build your credit score too? Below are a few ways to build your credit score while you swipe your credit card.

Ways to Increase your Credit score While using your Credit Card

  1. Pay your outstanding on time - The most crucial factor that affects your credit score is your payment history. Make sure to pay your credit card bill on time every month, as missed or late payments can have a negative impact on your credit score. Make sure to pay your credit card outstanding in full and not just the minimum amount.
  2. Keep your credit utilization low - Another important factor that affects your credit score is your credit utilization, which is the amount of credit you're using compared to your credit limit. Aim to keep your credit utilization below 30% of your credit limit. Let us assume that your credit limit is Rs. 1,000, try to keep your balance below Rs. 300. Credit bureaus view a higher credit utilization ratio as higher financial needs. Hence it can reduce your credit score.
  3. Use your credit card regularly - Using your credit card regularly and paying it off on time can help build a positive credit history. It's important to use your credit card responsibly and only charge what you can afford to pay off each month.
  4. Monitor your credit report - It's important to keep an eye on your credit report to make sure there are no errors or fraudulent activity. Make sure to report the errors immediately and get them rectified. Errors in the credit report like a wrong credit account can bring your credit score down. You can get a free copy of your credit report from each of the four major credit bureaus once a year. 
  5. Avoid opening too many credit accounts - Opening too many credit accounts at once can hurt your credit score. Only apply for credit when you need it and pay it off on time. It is difficult to manage too many credit cards and keep a note of the different payment due dates. Hence it is advisable to restrict the number of your credit accounts.
  6. Keep old good credit cards active - The period you use credit for is always used by lenders to assess your credibility. The general rule is that your chances of establishing good credit are higher the sooner you obtain and responsibly use a credit card. Keep your old credit card accounts open at all times. It might not be beneficial to have credit cards, utilize them for sign-up bonuses, and then close them afterward. Instead, make an effort to shuffle the deck, look for a card that matches your criteria, and keep it. The average age of your credit accounts decreases every time you open a new one or close an old one, which may affect your credit score. One's credit history is made up primarily of the length of their accounts.
  7. Maintain an emergency fund - It's simple to get trapped in a credit card debt cycle, especially when you're enticed to make large purchases. As fresh bills and situations continue to arise, some credit card users find it challenging to pay off the debt that is due. When your credit card balance begins to rise as a result of such usage, danger can follow. Lower credit scores result from a worsening utilization ratio.

Keeping a separate emergency fund on hand is the best approach to ending this cycle. In this approach, you can keep using your credit card for unplanned expenses while still paying your bills on time and in full and avoiding becoming sucked into a debt cycle.


Your credit card can be used to build your credit score. By making credit card payments on time, maintaining a credit utilization ratio under 30%, monitoring the credit report and raising disputes if any, keeping old good credit accounts active, etc., you can increase your credit score.

FAQ of How to build your credit score while swiping your Credit Card

1:What is a credit score?

A credit score is a numerical value assigned to an individual that represents their creditworthiness. It's a measure of how likely someone is to pay back borrowed money.

2:Why is having a good credit score so important?

Having a good credit score can make it easier to get approved for loans, credit cards, and other forms of credit. It can also lead to lower interest rates and better terms on those loans and credit cards.

3:How do I get a credit card?

You can apply for a credit card with a bank, credit union, or other financial institution. Many credit cards are available online, and the application process is usually quick and easy.

4:How do I use my credit card to build my credit score?

To build your credit score with a credit card, it's important to make payments on time and keep your credit utilization low. Try to pay your balance in full each month, and if you can't, make sure you pay at least the minimum amount due.

5:What is credit utilization?

Credit utilization is the credit that you actually use vs the credit that is available to you. The credit utilization ratio is important in determining your credit score.

6:How much should I use my credit card to build my credit score?

It's generally recommended to keep your credit utilization below 30%. 

7:What should I do if I can't make my credit card payments on time?

If you can't make your credit card payments on time, contact your credit card issuer as soon as possible. They may be able to work out a payment plan or offer other options to help you get back on track.

8:How much time does it take to increase one's credit score?

It takes time and constant effort to increase your credit score. Building a strong credit history may take a few months or even years.

9:Are there any other ways to build my credit score besides using a credit card?

Yes, there are other ways to build your credit score, such as taking out a small personal loan or getting a secured credit card. It's also important to make sure you pay all of your bills on time and avoid collections accounts or other negative marks on your credit report.