A credit card is an advantage that can fast become a nightmare if not strategically used. Building your credit score will help you enjoy even more credit benefits. Unsure of how to go about achieving this? Follow these steps.

1. Strategically Pay Your Credit Balances

The portion of your credit limits you’re using at any given time is called your credit utilization. Use less than 30% of your limit on any card, and lower is better. The highest scorers use less than 7%.

You want to make sure your balance is low when the card issuer reports it to the credit bureaus because that’s what is used in calculating your score. A simple way to do that is to pay down the balance before the billing cycle ends or to pay several times throughout the month to always keep your balance low.

2. Pay Your Credit Bills as and When Due

If you consistently make payments late, no amount of effort will help your credit score. A late payment may remain on your credit record for as long as seven and a half years.

Call the creditor as soon as possible if you are more than 30 days late with a payment. If you can, make the payment as quickly as possible, and then inquire as to whether the creditor would remove the late payment from your credit record. It’s still in your best interest to bring your account current as soon as possible, even if your creditor isn’t willing to negotiate a longer payment plan. An account reported as overdue lowers a consumer’s credit score by one point per month.

For instance, if you get a notification that a credit card account has been added to your credit file, but don’t recall doing so…

3. Consolidate Your Debts

In order to pay off many bills at once, it may be beneficial to get a debt consolidation loan from a financial institution like a bank or credit union. Then you’ll just have to keep track of one monthly payment, and if you can negotiate a lower interest rate, you’ll be able to get rid of your debt more quickly. This may help lower your credit usage ratio, which in turn can raise your credit score.

You may also use a debt transfer credit card to pay off many credit card bills at once. During promotional periods, several of these cards provide interest-free financing. You should be aware that balance transfer fees might range from 3 percent to 5 percent of the amount you move.

4. Offset Collections Accounts

If you pay off a collections account, the collection agency may cease listing the amount as owed and the prospect of legal action related to the debt disappears. Credit reports might have collection accounts removed if they are inaccurate or too old. If the collector agrees to cease reporting the account, it might really help. Having an account in collections has a significantly bad impact on your credit report.

5. Request for Higher Credit Limits

When your credit limit is increased but your debt remains the same, your credit usage ratio drops, potentially improving your credit score. You have a good chance of receiving a higher limit if either your income or your favorable credit history has increased.

6. Become an Authorized User

Ask to be added as an authorized user to the credit card account of a trusted family member or close friend with a large credit limit and a solid payment history. This has the potential to add the account to your credit reports and enhance the credit available to you. Authorized user status, sometimes known as “credit piggybacking,” enables you to profit from the good payment history of the principal user. Credit may be built without the account holder’s permission or disclosure of the account number.

For maximum benefit, you should use a credit card that reports to all three main credit agencies (Equifax, Experian, and TransUnion).

7. Track Your Progress Using Credit Monitoring Services

The process of tracking your credit score’s evolution using a credit monitoring service is straightforward. There are a number of free services that can keep an eye on your credit report for changes, such as when an account is paid off or when a new one is established. Additionally, at least one of your credit scores from Equifax, Experian, or TransUnion is made available to you on a regular basis.

Identity theft and fraud may be avoided with the aid of several of the top credit monitoring services. For instance, if you get a notification that a credit card account has been added to your credit file, but don’t recall doing so, you might contact the credit card provider to report possible fraud.