Some credit cards can build credit faster than others, though the difference is small. Credit cards with high limits and low fees can build credit faster because the more credit you have available and the less of it you use, the better it is for your credit score.
The problem is that it’s hard to tell how high of a credit limit you’ll receive ahead of time, unless you’re using a secured card, where your limit equals the amount of your security deposit.
Furthermore, the type of credit card you have does not factor into your credit score. Credit card issuers mainly report account activity to the major credit bureaus, such as whether you paid the bill on time and your credit utilization, and they only do so once a month. Under this system, it’s difficult for one type of credit card to build credit faster than another.
As a result, it’s better to focus on minimizing fees and maximizing rewards when looking for a credit card to build credit.
Key Things to Know About Building Credit with Credit Cards
Paying your balance on time every month is crucial.
Making credit card payments by the due date every month, preferably for the full balance due, is one of the best ways to build good credit. On the other hand, late or missed payments are one of the fastest ways to derail your credit, as payment history accounts for a large part of your credit score.
Newcomers to credit may have to wait to see any results.
If you’re new to credit and don’t yet have a credit score, it may take one to six months of account activity before there’s enough information on your credit report to calculate your credit score, regardless of the type of credit card you have.
Using two credit cards will build credit faster than one.
Having an extra credit card or two can generate more positive information to report to the credit bureaus, provided you pay the bills on time. The added available credit also makes it easier to maintain a low credit utilization ratio. A high utilization ratio that’s reduced to less than 30% will typically lead to an upswing in your credit profile.
Authorized users can build credit with someone else’s account.
An authorized user can build credit without the responsibility of having to pay the bill. Issuers regularly report account activity to the credit bureaus for all cardholders, and if the primary cardholder pays the bill on time, it will benefit the authorized user’s credit score too.
Whether you’re rebuilding damaged credit or just starting out with credit, you can sign up for a free WalletHub account and use our credit score simulator to see how different scenarios will affect your credit and about how long it will take to get a higher credit score.
This answer was last updated on 04/22/22 and it was first published on 02/22/22. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.