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How to Improve Your Credit Rating by Using Credit Cards

Your credit rating plays an important role in your life though many do not realize it. Your credit rating is the biggest determining factor when trying to secure a large loan for a house or a car. A poor credit rating can disqualify you from getting the loan you need to help you make the large purchase of a home or car which is a big part of the American dream. If you have a poor credit rating, all is not lost. You can work to improve your credit rating so that you can easily qualify for the loans that you need to help you achieve your dream.

One way that many are improving and rebuilding their credit is through the use of credit cards. Credit cards give you small lines of credit that allow you to make purchases and payments anywhere that credit cards are accepted. What makes them effective as a way to build your credit rating is that they function similarly to small loans. Credit card companies require that you make monthly payments to repay the loan that was given to you when you used your credit card. When you make your payments on time, your credit rating increases over time.

It takes a little more than applying for and owning a credit card to raise your credit score. Lenders are not too concerned about you having the opportunity to use your credit card in as much as they are concerned about you repaying the credit amount you used. This is what helps establish your credit history. Once you have applied for and received a credit card, the next step you should make is to make reasonable purchases with your credit card and repay the amount loaned promptly.

Using your credit card and promptly making the necessary payments is sure to build up your credit score. Some suggestions on how to use your credit card to build your credit is to use your credit card for typical purchases that you normally make such as for gas or groceries. Limit your spending to only that which you would normally spend on these things. Once you get the monthly bill for your credit card, pay the balance off using the money that you would normally spend. Over time this will help build your credit rating.

Another way you can use your credit card to build your credit rating is to make a purchase of one large item that you would normally have to save for. Examples of this can be a new television or new furniture. Do not make any other purchases on your credit card but do make the monthly installments promptly when you receive the monthly statements. Continue making the payments on time until the item is completely paid off. The results of your efforts will be an improved credit rating that will make it easier for you to secure larger loans that require a good credit rating.

About Author Hunter Riley :

Hunter Riley is an editor at, a website that will help you find the best credit cards to match your lifestyle. <a href="" target="_blank"></a> is dedicated to finding you the lowest credit card rates around.

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Article Added on Thursday, April 11, 2013
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