How to Increase FICO Score With Credit Card Utilization?

A borrower's credit score is a reflection of his credit history. It is a numerical representation of his ability and willingness to repay debt. By using credit cards, a borrower can raise or lower his credit score quickly. Through the proper use of credit cards, a borrower can raise his FICO score and give himself the opportunity to procure more credit at lower interest rates in the future.

Instructions

1

Note the credit limit of your credit card(s). Do not carry over 30 percent of the limit at a time. The lower the credit card balance versus the limit, the better the impact on your score.

2

Avoid opening new credit cards to take advantage of low balance transfer options. New credit lowers a credit score, as well as a lender checking your credit report.

3

Pay your credit card (and all debt payments) on time. 35 percent of your credit score is made up of your credit history. On-time payments will help to keep your hard-earned score high.

4

Use each open credit card once a month in order to keep the tradeline open. Open tradelines add length to your credit history, which in turn increases your FICO score. To keep it open but avoid new debt, simply charge one necessity to your card each month and pay it in full at the end of the month. For example, use your card for one budgeted grocery store trip a month and "pretend" the funds came from your checking account and not the credit card. Pay off the card in full once the bill arrives to avoid interest.