Credit cards can be a convenient way to make larger purchases more manageable or cover an emergency in a pinch, but you can also use them to boost your credit score.

Building and maintaining a positive credit score does take time, but a good credit score can make it easier to borrow in the future and hit bigger financial milestones like purchasing a home, qualifying for an auto loan, and more.

If your credit score needs some work, there are moves you can make to get your credit score to where you want it to be.

Understanding your credit score

Credit cards can help or hurt your credit score depending on how you use them. By strategically using your credit cards, you can ensure that your positive habits are reflected in your credit report and increase your chances of being approved for new credit.

A "good" or "exceptional" credit score will vary depending on the scoring model. The most commonly used scoring models are the FICO score and VantageScore models that break down your credit score into the following ranges:

The most recent data from Experian shows that the average American’s FICO score was 714 in 2022 – up from 711 in 2020 and 703 in 2019. Despite a series of federal funds rate hikes that raised the cost of borrowing and the price of everyday goods, consumers continue to manage their credit responsibly.

How to check your credit score

There are a few ways to check your credit score. Many credit card companies offer a free score within their mobile apps, including Wells Fargo and Capital One. If your credit card company doesn’t offer a free score, you can pay to see your score from one of the three major credit reporting agencies: Equifax, Experian, or TransUnion. You can request a free copy of your credit report from each of the three bureaus once a year, and many of them offer free credit monitoring products and services that show your credit score.

Knowing your score helps you determine how likely you are to be approved for a new credit card and the type of card you benefit from the most.

How to build credit with a credit card

Once you know where you stand in the eyes of lenders and credit bureaus, you can make a game plan for repairing your score. The type of cards you carry and how you use them will have a direct impact. Your unique credit habits and history will also determine the best course of action.

If you’re a student who is new to credit

It may be time to apply for your first credit card. When you’re issued a new credit card, your credit score may improve for a few reasons.

The amount of available credit will increase and reduce your credit utilization ratio; and if you don’t already have a credit card, adding a new type of debt to the mix will help diversify your credit mix – another important factor in determining your credit score. In fact, your credit mix accounts for 10% of your FICO score. This may not seem like a significant percentage, but if your goal is to build or improve your score, every little bit helps.

With the right card, you may even get a boost in the form of rewards. The Capital One Savor Student Cash Rewards Credit Card, for example, offers students 8% cash back on tickets purchased through the Capital One Entertainment portal, 5% cash back on hotel and rental car bookings through Capital One Travel, 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart® and Target®), and 1% cash back on all other purchases.

Be cautious when applying for a new credit card – too many credit inquiries in a short time can hurt your score.

If your credit score has seen better days

Consider a secured credit card. A secured credit card is a type of credit card that a cardholder must back up with a cash deposit that will serve as collateral. This way, the card issuer reduces the risk they’re taking and has a security deposit stashed away in case the cardholder fails to make payments on their balance.

These cards are typically a more viable option for consumers with bad credit who cannot qualify for an unsecured credit card or a card you qualify for without needing a security deposit. It’s important to note that these cards typically come with a lower credit limit, equal to the amount of your security deposit.

The major benefit of this type of card is that if you’re working on improving your credit score, a secured card can help you get started on that journey by allowing you to showcase your credit habits and eventually transition to an unsecured card. Many issuers like Bank of America and Capital One even offer free credit monitoring to help you track your progress.

Secured credit cards are popular among many major credit card issuers, and security deposits vary across companies. The Discover It® Secured Credit Card requires a security deposit of $200, but consumers who want a larger credit limit can make deposits in increments of $100 up to $2,500.

Other secured credit cards, like the Capital One Quicksilver Secured Cash Rewards Credit Card, have a minimum security deposit but base your maximum deposit on your creditworthiness. In the case of this card, your maximum limit will range between $1,000 and $3,000.

If you often overspend

Make a plan to keep your credit utilization as low as possible. Your credit utilization ratio – or credit utilization rate — is the ratio of credit you’ve spent versus how much credit is available. According to Experian’s data, credit utilization rates increased from 26% in September 2021 to 28% a year later. The culprit? Inflation and higher interest rates led consumers to spend more of their available credit to cover costs and put a strain on average FICO scores.

Many credit card issuers like Capital One, Chase, and Citi all make it easy for cardholders to track how much they’re spending through spending alerts that can make it easier to keep tabs on your credit card balance and remind you to make your monthly payment.

If you have a history of missing payments

Set up reminders on your phone or enroll in auto-pay. Your payment history accounts for 35% of your FICO score and 41% of your VantageScore. As such, it’s important to make on-time payments each month on your due date to show your lender and the major credit bureaus that you can manage your credit responsibly. An easy way to avoid a late or missed payment: Set up automatic monthly payments so that the money is automatically withdrawn from your bank account when your payment is due.

If you’re having a hard time getting approved for a new card

Consider asking a friend or loved one to become an authorized user on their card.

If you can’t qualify for a new card, becoming an authorized user on a family member or trusted friend’s credit card can potentially help you raise your score. An authorized user is someone who is added to a primary cardholder’s account and, in turn, receives a card of their own to make purchases with.

The upside: As an authorized user, you can benefit from a primary cardholder’s good behavior, like a history of on-time payments and a low credit utilization rate. However, the opposite is true, too. A history of late or missed payments can drag your score even lower.

If you’ve neglected older accounts

Make it a goal to immediately pay off existing credit card debt and keep those accounts open. Closing out an older account to simplify your finances can be tempting, but this can work against you and your credit score.

Both scoring models consider the age of your credit history when calculating your score. Keeping older accounts open not only shows lenders that you have a track record of managing credit but also lowers your credit utilization by maintaining a higher amount of available credit.

Ultimately, building a positive credit score and credit history takes time, but implementing the right habits can get your score back on track.

Read more: How to build credit without a credit card

---

Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn't include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.