Credit Card Tips That Work!

What is the optimum balance to keep on your credit card to build credit?

Should you pay down your Visa to $10.00 each month and let the small balance float from month to month?

Should you max out your card so your credit report will reflect full credit card usage?

The answer to both questions is NO!

I have had members share both beliefs with me so let me clear the air:

The two key components to building credit with a credit card is PAYMENTS and TIME.

Ideally you will utilize your card for at least one purchase each month, then pay that card to zero.  That payment can be made anytime that is convenient for you.  You do not need to wait until the due date. The key is to have a payment reported to the credit bureau. Payments build history.  History builds the score.

The other factor to consider is the percentage of credit utilization (balance vs. credit limit).  The lower the utilization the more positive it reflects on your credit and your score.

That means a low or zero balance reported, is a good thing!

Over time this will show controlled usage and responsibility with on time payments. This will reflect positively on your credit history and your credit score.

If you have questions or would like to learn more about improving or building your personal credit history, I can help! CLICK HERE to schedule your Personal Financial Coaching session.

Lisa Atkinson
TFCU | Personal Financial Coach
latkinson@dbctl.com

As a Personal Financial Coach, I do not provide legal or tax advice. Tucson Federal Credit Union does not guarantee that this service will achieve any particular objective or outcome. For any legal advice, please seek the advice of an attorney or tax professional.