How to Improve Your Credit Score With Credit Cards

Credit-savvy customers can improve credit scores.

Credit-savvy customers can improve credit scores.

Applying for several credit cards to improve your “utilization rate” may backfire if you’re not informed about how credit scores work. Payment history carries the most weight in the calculation of a credit score, encompassing 35 percent of the calculation. The second category is “amounts owed” which includes the utilization rate. This category encompasses 30 percent of the credit score.

Determining Whether You Can Use Credit Cards to Improve Your Credit Score

Review your payment history. If all credit cards are “paid as agreed” for at least six months, the credit score will reflect this. If you have only one or two credit cards that carry a balance greater than 20 percent of your credit line, applying for a new credit card may help your score. However, if there are late payments, applying for a new credit card may hurt more than help. Application for new credit combined with late payments indicates a customer in need of funds.

Review the amounts owed. If you have one credit card that you utilize heavily, the utilization rate (amount owed divided by total credit lines) may be hurting your credit score. If the utilization rate is greater than 20 percent, applying for a new credit card can help in this category, as long as you do not increase your spending proportionately to your new total credit line. The new credit card will help build a solid payment history as the payment pattern is accumulated over six months, and the credit score will increase.

Review the length of your credit history. If you have not had credit for at least a year, getting another credit card will probably hurt more than help. Because a solid credit history has not yet been built, the length of credit history has a larger impact on the overall credit score. When another new credit card is added, this action indicates more debt for an untested debtor, likely resulting in a lower credit score.

Items you will need

  • A copy of your credit report from each credit bureau company


  • Derogatory information such as late payments, bankruptcies, and court judgements have the greatest impact on credit scores. These items all last for at least seven years on the credit bureau and little can be done to improve a score except to establish a solid payment history thereafter.

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About the Author

Sara Huter is a professor of economics. Her background also includes risk management in the banking and energy industries with expertise in credit scores. Huter received an M.B.A. in finance from Texas A&M University and a B.S. in information systems from Kansas State University. She has been writing for over five years with work at, and

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