• Having a credit card in your name will build your credit history because of the monthly payments you are required to make. Building a good credit history contributes to having a higher credit score.


    Each month, the credit card company will report whether you paid your bill as agreed. This information will go on your credit report.


    Your credit card company will report whether your account is current each month, whether you have used the card or not. For example, even if you did not spend any money and your balance equals $0, you will still be reported as being on time on your credit report.


    Your payment history accounts for 35 percent of your credit score, so using credit wisely has a major impact on your credit score.

    Time Frame

    Credit cards count towards the length of your credit history, which accounts for 15 percent of your credit score.

    Importance of a High Credit Score

    Lenders use your credit score as one factor in determining whether to issue you a loan. If you are approved, a higher credit score may qualify you for a lower interest rate.


    MyFICO: How Your FICO Score is Calculated

    MyFICO: What's In Your Credit Report?

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