Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
How Using a Credit Card Can Help Build Your Credit Score
Moneymagpie Team
16th Sep 2025
Your credit score plays a key role in whether you’re approved for credit, such as a loan or mortgage. Lenders use the score to establish how reliable you are when it comes to borrowing and repaying money.
Credit cards are another form of credit where lenders look at your score beforehand. They require careful financial planning in order to meet repayments. However, when used and managed wisely, a credit card can help build or improve your credit score over time.
- Understanding your credit score
- How credit cards can help improve your score
- Best practices for responsible credit card use
- Mistakes to avoid when building credit
Understanding your credit score
Your credit score is a number – typically a three-digit number – that serves as a representation of how well you manage credit. The three main credit reference agencies for those in the UK are Experian, Equifax, and TransUnion. They calculate your score based on your credit history.
Each agency uses its own scoring system, but they all consider similar factors. These include:
- How reliably you make payments
- How much of your available credit you use
- The age of your credit accounts
- The types of credit you hold
- Whether you’ve made too many credit applications recently
Your score influences your chances of approval as well as the interest rates and credit limits you’re offered. A strong score can open the door to better financial products, while a low one might limit your options.
How credit cards can help improve your score
Every time you use your credit card and repay the balance on time, you show lenders that you can manage credit responsibly. This helps build a positive payment history, which is one of the most influential factors in your credit score. Even small, regular purchases, like paying for travel, followed by prompt repayment will count in your favour.
Credit utilisation also matters. This refers to how much of your credit limit you’re using. It’s calculated by the amount you owe on credit cards and loans being divided by your total credit limits.
For instance, if your card limit is £1,000 and your balance hovers around £200, that’s a 20% utilisation rate – well within the healthy range. Keeping this figure low shows that you’re not over-reliant on borrowing, which can positively impact your score.
Time also plays a role. The longer you maintain an active credit account that’s well managed, the better it is for your score. Building a track record of steady, responsible use over months and years sends a reassuring signal to potential lenders.
Choosing the right credit card can make a difference too. Some cards are designed specifically for those looking to rebuild or improve their credit score, including credit cards that you can still be eligible for if you have bad credit.
Best practices for responsible credit card use
To make a positive impact on your credit score, use your credit card regularly but in a controlled way.
- Set up a direct debit to at least cover the minimum payment every month. This helps you avoid late payment fees and protects your score from damage. Whenever possible, pay off the full balance to steer clear of interest charges.
- Avoid spending up to your limit. A lower balance shows lenders that you don’t depend on credit to get by. Try to stay below limit, and resist the temptation to use your card for impulse purchases or things you can’t repay within a short time.
- Only borrow what you know you can afford to repay. A credit card isn’t free money; it’s a short-term loan. Using it as part of your regular budget, and treating it like cash from your own account, will help you stick to a repayment plan.
Mistakes to avoid when building credit
- Late or missed payments are the quickest ways to damage your credit score. Even one missed due date can stay on your record for up to six years. Therefore, always pay on time.
- Avoid applying for multiple cards in a short span. Each application leaves a footprint on your credit file. Too many at once can make lenders view you as a risk, so space out your applications and only apply for products you’re likely to be approved for.
- Don’t rely on credit to cover everyday living costs. This can quickly spiral into unmanageable debt and harm your financial stability. Instead, use your card strategically.
Managing your credit card well can be one of the simplest ways to strengthen your financial future. By meeting repayments and being careful with credit, you can focus on the long term. This, in turn, means you’ll build a credit history that opens up financial opportunities. You could get access to more attractive financial products and use these to achieve your goals.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
Subscribe
Login
0 Comments
