Does Your Credit Card Help You Build Credit | Refresh Financial

Official blog of Refresh Financial

Is your credit card really helping you build credit?

Credit cards can be an excellent tool to help you build your credit score, but only if used responsibly.

Here’s what not to do if you want your credit card to work for you, and help you build credit:

Do not forget to pay your credit card bill. Paying bills on time accounts for 35% of your credit score. When you are late paying your monthly credit card bill it can have a big impact on your score.

Do not apply for too many credit cards in a short period of time. Credit inquiries make up 10% of your score. If you apply for too much credit in a short period of time, it looks like you are desperate to find a source of credit.

Do not spend too much of your available credit. Credit usage percentage makes up 30% of your credit score. For maximum credit-building, you should keep your credit usage percentage across all sources of credit below 35%. This means if your credit card limit is $1000, you should never carry a balance of over $350 into the next month. If you do plan on using your credit card to make larger purchases, make sure you pay the amount off before the end of your credit card grace period to a) keep your credit usage percentage low and b) to avoid paying interest on your purchases.

Given that credit usage percentage makes up almost a third of your credit score, we have introduced a new tool for our secured card customers.

We now alert our customers within their personalized dashboard when their credit usage percentage is getting too high and is starting to negatively impact their credit score! We encourage customers who are at risk of damaging their credit to make a payment to bring their usage percentage down:

  • Keeping your credit usage percentage below 35% is optimal for fastest credit building, and we let our customers know they are on the right track in their dashboard:

  • When a client’s card balance is over 35% of their available credit it is going to start having a moderately negative impact on their score. We let our clients know so they can work to pay down the balance:

  • If our clients ever carry over 70% of their available card limit into the next month it starts being critical for credit building efforts. Getting out of the red as soon as possible must be a top priority:


Want to get your hands on a Refresh Secured Card that has been specifically designed to help your build credit? Apply online in less than 20 minutes and start your credit building journey today!


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