stock image of a track

Using Credit Cards to Build Credit

12/10/19

It is imperative for all consumers to understand how important their credit score is. Whether you want to buy a new mobile device, sign a rental lease, obtain an auto loan, or purchase a home, a favorable credit score offers benefits in various financial endeavors.

The Basic Steps to Building Credit

The process of building credit is straightforward, involving key elements:

- A company extends a line of credit to you.

- A structured payment schedule becomes an integral part of the agreement.

- Adherence to the schedule, inclusive of any associated interest charges or fees, is imperative.

- Timely payments are essential to fortify your credit history.

The Role of a Credit Card in Credit Building

Embarking on the journey of building your credit often necessitates the opening of a credit card account. A card with a modest spending limit is always the best place to start. When opening your first credit card, here's a few tips to keep in mind: Keep your utilization under control (ideally below 30%), limit your purchase sizes, and establish a track record of responsible payments. A good payment history is crucial for fostering good credit and building your credit in the future.

Exploring Secured Credit Cards

Secured credit cards are a good alternative for anyone who is struggling to receive approval for a conventional credit card. Timely monthly payments on secured cards, which draw funds from a pre-funded account, contribute significantly to the building of your credit. Be sure to select a secured credit card whose issuer reports to credit reporting agencies to ensure your credit report reflects your efforts.

Alternative account types

If obtaining conventional and secured cards both prove challenging, exploring other options such as joint account cards or becoming an authorized user on someone else’s account can help get you started in building your credit. In both cases, make sure that all parties make payments on-time so that your credit is helped and not harmed by the joint effort. Joint accountholders and authorized users are all responsible for reliably paying according to most cardholder agreements.

Building credit takes time, so be willing to exercise patience while making all monthly payments, and monitoring your score for progress. Sunflower Bank may have a Visa® rewards credit card that’s right for you. Stop by any Sunflower Bank location(Opens in a new window) today, or call Customer Care at 888.827.5564 to get started. 

Personal – Saving, Planning & Budgeting