Surprising ways a credit card can improve your credit score

You might think your credit card is the enemy of your credit score. But that’s not necessarily the case. In fact, a credit card can help boost your score—if you use it right.

Here are four reasons why.

🕰 Some history is better than none

If you’ve no past as a borrower, then it’s tough for a lender to predict your future.

Having a credit card with a healthy history is a big tick for your credit score because it suggests you’ll be trustworthy next time you borrow.

💪🏿 Demonstrates reliability

If you’ve made your credit card repayments on time, then that demonstrates you’re a borrower who can be relied upon - and it can push your credit score higher.

That said, if there’s a few late repayments on your record, don’t panic! Make up for it by being on time in the future.

🙆🏼‍♀ Shows discipline

Another thing that can affect your credit score is your ‘credit utilisation ratio’. Your credit utilis … what? To figure it out, divide the amount of credit available to you by the amount of credit you’re currently using.

The lower the ratio, the better. This pumps up your credit score by showing you’re responsible. In other words, you choose to use credit when you need to, not because you’re hopeless in the face of temptation.

🎩 Proves your money management skills

Got more than one credit card and maybe even a couple of other debts?

Juggling many types of credit indicates you’re good at keeping your money under control, even when things are complex.

📚 Want to learn more?

To show lenders that you are a-okay as a borrower, a good place to start is understanding what impacts your credit score.