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How to improve your credit score with a credit card

How a credit card can build your credit score

published: 05 August 2022
Read time: 5 minutes

Looking to improve your credit score but not sure where to start? This guide explains how finding the right credit card can help increase your credit rating

If you’re a young person who's never borrowed before, or you have a poor credit history, finding the right credit card can be a step towards improving your score.  

With a strong credit rating lenders will be more likely to accept you for borrowing in the future. 

How to build your credit history 

A credit card lets you borrow money to pay for goods and services and pay the money back at a later date. Interest is also likely to be added unless you clear your balance each month. Used responsibly, a credit card can help build your credit history in a positive way. 

Why is building a credit history so important? After all, if you have no history of bad credit or debt problems, you’ll find it easy to get a credit card, right? In reality, if you have little to no credit history, lenders won’t have the evidence to see you can manage credit well so they’re likely to be reluctant to offer you a credit card.  

A good credit score is proof you can borrow and repay in good time – which should usually improve your chances of being accepted for a loan or mortgage in the future. Finding the right credit card can help you to build a strong credit score, whether you use balance transfer credit cards or credit cards for bad credit

Lady using a credit card

How can I improve my credit score with a credit card? 

Showing that you can responsibly handle credit will help increase your credit rating over time. Using a credit card is one way of doing this. While increasing your credit score might be a primary reason for getting a credit card, there can be other advantages to having a credit card. This is why picking the right type of card is also important.  

There are different credit cards available to suit different needs:

Credit builder credit card 

If you have bad credit and have struggled with debt in the past, a credit builder card can help improve your credit score. The lender will initially give you a low credit limit which you can use to make small purchases. As long as you pay off the balance at the end of each month, you’ll begin to demonstrate responsible borrowing and your credit score should improve over time. 

Balance transfer credit card 

A balance transfer card allows you to transfer an existing credit balance onto a new card, often with a lower or 0% interest rate. This can help you manage your debt and pay less interest for a period of time to get your finances back on track, and in turn help improve your credit score.  

Student credit card 

Many students won’t have used credit before and student credit cards are designed with this in mind. While borrowing limits are normally kept comparatively low, they can be useful when studying to help cashflow and might also come with some eye-catching introductory offers. Importantly, if used responsibly they can help to start building your credit rating.   

What to be careful about when using a credit card 

There are some things you need to watch out for when using a credit card, including:  

Missing payments: A late or missed payment can impact both your credit rating and push up the interest rate on your card – meaning you’ll owe more in interest and late fees. 

Only making minimum payments: If you only make the minimum payment each month, interest will start to be added to your card balance and the debt can grow quickly. 

Over-spending: Use your card too often and it can lead to a big card balance which could affect your credit score. You run the risk of it growing into a debt problem. The larger your balance the harder and more expensive it could be to pay off. 

What to do if you’ve been rejected for a credit card in the past 

Being rejected for a credit card may leave you feeling disheartened, but it doesn’t mean a permanent ‘no’ to borrowing. The thing to be wary of is that too many 'hard' credit checks over a short period of time can negatively impact your credit score for a few months. This can limit the likelihood of you being approved for credit in the future. 

But this is where we can help. When you compare credit cards through MoneySuperMarket we’ll only carry out a 'soft search’ on you to check whether you’re eligible – so it won’t negatively impact your credit score. Then you can see which cards you're likely to be accepted for before you apply, reducing the risk of another rejection. 

How to improve your credit score 

There are several ways you can improve your credit score to open the door to better deals on credit cards and loans, including:  

  • Check any linked accounts: Find out if your credit score is linked to your spouse or family member through a joint account you have with them – if they have a poor credit score, this may affect yours 

  • Register to vote: You’ll find it harder to get credit if your name isn’t on the electoral roll. You can register on the GOV.UK website 

  • Paying bills on time: Keeping up with your household bill payments, including your phone contract, can prove to lenders you’re keeping your finances in check 

  • Check for errors: Have you recently moved house or got married and changed your surname? Remember to update your credit report 

  • Existing debt: You should try to pay off any existing debt before applying for new credit. Lenders may hesitate to lend you more money if you already have a high level of debt 

How long will it take for your credit score to improve? 

With the right action you should start to see your credit score improve over time. As you meet your repayments on time, your credit rating should rise, but it may not be immediate. You can keep an eye on your credit report and score for free, including tips on how to improve it, with Credit Monitor. 

A consumer survey of Generation Z by MoneySuperMarket found that 35% of young people had checked their credit score online as a way of keeping on top of their credit rating and taking steps to improve it. 

Consider quick wins that could improve your credit score, such as registering on the electoral roll, paying your bills on time and checking for fraudulent activity. These are all simple steps that could help you nurture your credit rating. 

How to monitor your credit score 

There are different ways you can monitor your credit score. Credit reference agencies – sometimes called CRAs – such as Experian, TransUnion and Equifax, will have a record of your credit rating, and you can get a copy of your credit file online for free. 

You can also keep an eye on your credit score with Credit Monitor, where you can get a free copy of your file and free tips on how to improve your score and see where you're doing well already. MoneySuperMarket’s credit monitor service uses the TransUnion credit reference agency. 

Other useful guides 

Want to discover more about choosing the right credit card for you? You may find these guides helpful: 

Getting your first credit card 

Advantages and disadvantages of credit cards 

Easy to get credit cards 

How to compare credit cards with MoneySuperMarket 

Finding the right credit card is easy when you compare with MoneySuperMarket. First, you’ll need to tell us a little about yourself and your financial situation, including information on your employment, income and what you’ll be using your new credit card for. 

From there, you’ll receive a list of credit cards that match your needs. We’ll even show you which cards you’re most likely to be accepted for if you apply with our credit card eligibility checker. This way you reduce the risk of being rejected and keep your credit rating in good shape. Searching and comparing in this way won’t affect your credit score in any way. 

Once you’ve found the card you want, just click through to the provider to finalise your application. At this point, the lender will conduct a ‘hard credit check’ on you. 

Once you’re accepted for a card deal you’ll be told your credit limit. As soon as your card arrives in the post you just need to activate it – then it will be ready to use. 

MoneySuperMarket is a credit broker not a lender. You must be 18 or over and a UK resident.

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