How do I build a good credit score? I just got my first credit card with CenturyOne. How often should I use it, and for what?

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Posted by Kaia A. (MONEY FORUMS: 4, Answers: 1)
Asked on February 12, 2016 4:16 pm
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On time payments are the number one way to build your credit score. Never, ever pay your bill late, even if you can only make the minimum payment, do it on time. It is better to pay interest than late fees (when you have to pay both anyhow).

The next most important factor is called credit utilization. Credit utilization is the amount of credit you have used divided by the amount of credit you have available. People with good to excellent credit have an average credit utilization of less than 15%.

This means that if your credit limit is just $1000, you should never have more than $150 charged on your card before you pay it off. With just one credit card, and a low credit limit, you can have good credit.

For a very long time, I only had $2500 in credit available to me, and I simply paid my phone bill on my credit card and paid my credit card in full each month.

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Posted by Hannah Rounds (MONEY FORUMS: 1, Answers: 54)
Answered: February 14, 2016 3:32 pm
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A few things Kaia. First of all, only use if for things that are already in your budget. You don’t have to use it much. Maybe use it for gas if you have a car, or for budgeted grocery or drug store runs. On the credit card web site, set up an automatic minimum payment if payment isn’t received by the due date. Then get in the habit of setting up your actual payment using your bank’s online bill payment system when you receive the bill. You can set the payment date for later, up to the actual due date. Paying it on time, not running the balance up to the limit (aim for maybe10%, 20% max), and paying it in full will all help your credit score.

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Posted by Beth Tallman (MONEY FORUMS: 1, Answers: 61)
Answered: February 12, 2016 4:28 pm