Whether you should really depends on your financial habits. Read on to learn more about credit card use while you’re trying to bump up your credit score.
When using a credit card may help your fair credit score
If you have a fair credit score, you can improve it by showing that you are a financially reliable and responsible person. One way to do this is to pay your credit cards off in full and on time each month; this will positively impact your fair credit.
A caveat: The amount you charge each month should be 30% or less of your maximum credit limit. Otherwise, you could damage your credit score.
When you should consider not using a credit card
If you don’t always pay your full credit card balance on time, then your credit card use could be negatively impacting your goal to raise your fair credit score. Or if you typically use more than 30% of your available credit, that’s another ding against your efforts to build up your fair credit.
If either situation applies to you, then consider not using your credit card until you establish better financial habits and your credit score is higher.
Other ways to improve your fair credit score
There are ways to boost your fair credit other than through credit-card use. In fact, some of these can have an even bigger impact on your score, so you may want to consider tackling them before you stop using credit cards.
Next, repay your debts as quickly as possible. To help with this, contact your credit-card issuer and negotiate your annual percentage rate (APR) down; the money you save on interest can be put toward your debt instead. Lastly, avoid going into further debt by establishing good financial habits — such as paying your balances off in the agreed-upon time for the agreed-upon amount.
If you do decide to stop using your credit card to give your fair credit a chance to improve, make sure you clear the balance on the card — and then don’t cancel the card. Having a credit card for a long period of time helps your average age of accounts, which helps your credit score.
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