Use of credit card to build credit?

Start with the high impact factors. Most important, on time payments 99 to 100% on time, excellent.

Next, balances. Keep them below 30% or paid in full.

3rd is derogatory remarks. Collections or bankruptcies are bad.

Credit age is in the medium category. 7 years and up is good.

Total accounts and hard inquires have an effect, but a low one. They drop off in 2 years.

Keep those factors in mind.

It does build if you pay in full.

Usage does not build credit. You cannot build credit by using a card. You can build credit simply by having a card, even if you don't use it. You can build credit by paying the card in full, but you seem to be against that.

The usage actually lowers you credit. You build credit by having it available but NOT used.

Yes, this is a good idea. Pay it off every month and you will build credit. That's what I did when I turned 18. And I had excellent credit because of it.

Never use more than 30% of your available balance.

Use the card for whatever works for your situation - but don't buy something you can't afford - so things you need anyway, like gas and groceries are perfect.

It doesn't matter how many times you use the card during the month, so just making one purchase is enough.

Wait for the bill to cycle - if the bill doesn't cycle, nothing gets reported - so paying a card back before the bill cycles does nothing. Pay the balance in full before the due date.

So - basically, what you describe is the perfect way to use a credit card to continue keeping your score good and working toward a higher score.

There are also a few other things that build your score. Things like the age of your accounts - so the longer you have a credit card, the age of that card helps your score. The number of accounts you have can actually help your score. Sometimes the reason a credit score isn't improving is because you just haven't used enough credit. Having one or two other accounts that you just use sometimes (maybe once every three or four months) is another way to help increase your score. Of course, when you add accounts, you take a small hit on your score because of the inquiry to get the account. The age of accounts is based on an average age, so new accounts also cause a temporary hit on that aspect too. But, having multiple lines of credit with unused balances is another way to build a good score.

Your credit score is made up of 4 primary factors, listed in order of importance:

1. Making payments on time each and every month.

2. How much credit is used vs. available. If you have $20,000 in total credit on 4 different cards, but only have $200 total charged, that's a great credit ratio. If you had $15,000 charged, that would be a poor ratio.

3. Length of credit history. Accounts going back years helps, as long as they've been paid on time.

4. Credit activity. This means how often you apply for new credit. A new credit card, or car loan, or whatever. Once in a while is fine, but if they see too much, it's a big negative.

So for you, Any credit cards you have, keep them forever unless they start charging you an annual fee. That increases your length of credit history. Use them each month for something small, and pay them off in full on-time each month.

You do those things and your credit score will go up and up.

Why do you want it to be better? Once you get over 750, it does not give you a better rate.

I pay zero attention to what my usage might do to my score, I pay at the last possible minute to maximize my interest income.

Carrying a large balance might knock my score down a few points but its temporary and what difference does it make to me if my score is 828 or 814? I don't mean carry it as in pay interest, I mean let it show on my statement. If you are that worried, pay in full the day before the cycle ends so you always have a zero balance.

My credit score is 850 and I pay off the statement balances monthly and have for years.