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Building Credit: Make Payments on Time & Use a Credit Card Wisely

sue12851

Updated: 6 days ago

Making Timely Payments

According to Tim Dickinson, the first and most important step in improving your credit is to make your payments on time. He advises setting up automatic payments to ensure that your monthly payments are made in a timely manner. By doing so, you can establish a positive payment history, which is a crucial factor in determining your credit score.


Using a Small Credit Card Responsibly

While credit cards may have a negative reputation, Dickinson suggests using a small credit card to your advantage. By obtaining a credit card with a low limit, such as $300 to $500, and using it for everyday expenses like groceries and gas, you can gradually build your credit. The key is to pay off the balance in full each month, rather than carrying a balance. This responsible use of credit will demonstrate your ability to manage debt and improve your credit score over time.


Keeping Credit Card Balances Low

In addition to using a credit card responsibly, Dickinson emphasizes the importance of keeping your credit card balances low. Ideally, your balance should not exceed 10% to 20% of your credit limit. For example, if you have a credit card with a $1,000 limit, try to keep your balance below $100 to $200. Exceeding this threshold can negatively impact your credit score, even if you make timely monthly payments.


Ready to ditch the credit card myths and build stellar credit? Tim Dickinson's advice is clear: consistent on-time payments and responsible credit card use are key. Feeling overwhelmed? Let's chat! Schedule a free consultation with me to discuss your credit-building goals.

📲 517-243-1721


P.S. Dive into more information about mastering your mortgage, here! You will be able to watch Tim's full interview.


Let's turn your homeownership dreams into reality together!

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©Sue Dickinson, Associate Broker with Five Star Real Estate

2417 Showtime Drive, Lansing, MI 48912

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