How to Improve Your Credit Score Using Your Credit Cards

Jan 11, 2019

Woman with credit cards and a calculatorAre you anticipating making a major purchase such as a car or home, considering refinancing your mortgage or seeking funds from a Home Equity Line of Credit (HELOC) in the upcoming months? Taking these key steps now can boost your credit to help you secure the loan you need at the best rate possible:

Stay on track with payments: Your payment history comprises the largest percentage of your FICO score at 35 percent, so paying your bills on time every month is critical for good credit. Do life stresses and a busy schedule make it difficult for you to stay on top of your budget—not to mention all of your bills? Consider using an online personal financial management (PFM) tool like MoneyTrac, which helps you easily monitor spending, set and maintain a budget and manage debt. This feature allows you to combine all of your accounts together for a complete picture of your financial life. In addition, color-coded visuals such as bar charts and budget bubbles make is easy for you to visualize how much of your money must be allocated to certain bills.

Don’t let your balances climb too high: After paying your bills on time, keeping the amount you owe low as compared to your credit limit is the second most important way to positively impact your credit. Credit utilization, which is the percentage of your available credit that you are using, comprises 30 percent of your credit score according to FICO.  For example, a person with a credit card balance of $2,000 and $10,000 of available credit has a credit utilization ratio of 20 percent. Aim to keep your credit utilization ratio between 10-30 percent. Of course, in a best case scenario, you would always pay your bills in full with each statement.

Consider paying bills more than once a month: If you aspire to stellar credit before you apply for a loan, a good strategy to consider is to make multiple payments on your credit card accounts each month. This may sound extreme, but it actually makes sense when you factor in that your last statement balance is what card issuers report to credit bureaus. If you make payments to keep your balance low prior to when your statement is issued, you can avoid having a having a credit check with a large balance on one or more of your accounts. This is especially important to remember for those who tend to put large purchases on their credit cards and, like most people, wait until the end of the statement cycle to pay their bills.

Don’t stop using your cards entirely: Keep in mind that some credit card issuers may discontinue your account if you don’t use it for long periods of time. If this happens, it can lower your credit score temporarily since it reduces your total available credit, thereby raising your credit utilization ratio. In addition, it’s a good idea to use your credit cards at least once in a while so that they remain part of your credit history showing purchases with responsible payments.

Consolidate cards with high-interest rates: If you’re carrying a balance on several credit cards with high interest rates, you may want to consider transferring your credit debt to a card with a lower rate. By consolidating your credit cards to just one with a reduced interest rate, your payments will go further toward paying down your balance each month. This way, you can lower your credit utilization rate and boost your credit score.

Thinking about transferring your high-interest credit card debt to a card with better terms? SF Police Credit Union has a great option for you! With no annual fee, our Platinum Visa offers CU Rewards® and other features and benefits that never expire! Visit for details.

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APR = "Annual Percentage Rate". Actual APR is based on your credit profile and may be higher than the lowest rate available. Posted rates may include promotional discounts and other terms and conditions. APY = "Annual Percentage Yield". Rates are subject to change without notice.

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