Putting regular expenses on a credit card helps you establish credit. The KEY thing is to pay off your credit card bill in full AND on time each month. The credit card issuer will report your payments to the credit bureaus.

So getting a credit card and using it regularly and responsibly is one of the quickest and most effective ways to build or rebuild your credit.

Your payment history makes up 35% of your FICO credit score, so credit utilization is one of the best things you can do to build your credit.

Pay On Time & Pay In Full

The goal is to use credit cards to your advantage and to make them a benefit. To do that you should always track how much you are spending, so that you know for sure that you can pay the bill in full at the end of the month.

You do not want to carry a balance. So the more focused you are on spending within your means, the easier it will be to avoid carrying a balance and paying high interest.

Keep Your Balance Low

The second most important factor in your FICO score is the amounts you owe, which accounts for 30% of your score. Plus FICO looks at your credit utilization, which is the amount you owe as a percentage of your available credit. A high utilization could make you more likely to overextend and miss payments. Thereby, keeping your credit card balance relatively low, put you in better control paying in full and on time each month. Also know that your credit utilization rate should be less than 30%.