Is it beneficial to use a debit or credit card to get a better credit score?

We can already tell you that the debit card makes no difference, because both it and current accounts are not reported to the credit bureaus. For this reason, it will not change your score.

Referring to the credit card, it is possible that it can help you build credit. But of course it needs to be used carefully and responsibly, so that it doesn’t get in the way more than it helps.

How to create credit using a credit card?

With a credit card, you are the one who defines how much you will spend each month. By managing it in a positive way, the creditors will have a positive view of you and you will give them more credibility.

What is most taken into consideration when it comes to credit scoring is your payment history. When you are late on payments, this ends up on your report for about seven years. So any missed payment affects your score quite negatively.

It is no secret that the key to success is having a good credit score. So having access to a credit card, with a good payment history reported on your report, will reassure lenders that you are more confident that you will pay off future debts as agreed.

About the good use of the credit card

In credit scoring it is taken as the second most relevant point, the credit use identifier. In other words, it is the balance index. The calculation of the utilization rate is done as follows.

The total balances used on your credit cards are divided by the total credit limits. It is recommended by experts that this usage rate stays below 30%. But it is still better for the score if it is less than 10%.

Ideally, credit card bills should be paid monthly in full. This way you will avoid running up debts and will not pay abusive interest rates. By managing lower balances, creditors will see their responsibility in credit management.

Tips on how your credit score can improve

The first step is to always pay on time, not forgetting the due dates. If you have overdue accounts appearing on your report, be sure to update them as soon as possible and settle them all.

For any outstanding debt, it is important to make an effort to pay it off as soon as possible. Currently, some scoring methods have excluded charges that have already been settled from the calculations.

If possible, cut down on credit card spending as well. Another tip is to learn about Experian Boost and sign up for it. This resource can help you improve your score. And if you don’t have any credit accounts to your name, find out about Experian and create your credit report through them.