Can I Use My Credit Card To Improve My Credit Score?

Can I Use My Credit Card To Improve My Credit Score?

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated February 28, 2020

If your credit score could use some improvement, you’re not alone. Thousands of Canadians across the country have bad credit, which is preventing them from getting approved for loans, apartments, and even cell phone contracts.

With bad credit, you’re pretty limited as far as what you can do financially. But your credit score doesn’t have to be sub-par forever. Luckily, there are several ways to improve your credit score if it needs a boost, including applying for and using your credit card appropriately.

Want to know why all Canadians should be monitoring their credit scores? Find out here.

Convenient And Useful

Credit cards are handy financial tools that allow you to easily and quickly make purchases without having to hit up the ATM for cash. Not only are credit cards convenient, many of them also allow you to collect “points” with every purchase you make. Whether these points can be redeemed and put towards travel purchases, gas at the pump, groceries, or any other type of expenditure, you can make your money work for you thanks to your credit card.

But these powerful little pieces of plastic can be used for a lot more than just expenditures. If used properly, they can also help you improve your credit score. Here are some tips for using credit cards to give your score a boost.

Click here to learn some ways of increasing your credit score without increasing your credit card debt.

Choose The Right Credit Card

If you don’t already have a credit card and are looking for one to apply for, be sure to do your homework and select the right one. You don’t want to apply for a bunch of different credit cards, as this will only be worse for your score.

What is a credit inquiry? Find out here.  

In your particular situation, you may find it difficult to get approved for a traditional credit card since issuers usually like to deal with clients who have a good credit score. In this case, you may want to consider applying for a secured credit card.

These cards require that you put a certain amount of money up front as collateral or security, which essentially becomes your credit limit. You’re only allowed to spend up to the amount that you’ve deposited into the card (keep in mind that a secured credit card is not the same as a prepaid credit card). Be sure to choose a card that meets your requirements and even offers extra perks and rewards.

Depending on how responsible you are with the card, your credit score can be improved in as little as 6 months.

To learn the differences between secured credit cards and prepaid credit cards, read this.

Pay Your Bills on Time Every Month

Once you’ve been approved for a secured credit card, the best thing you can do is pay your bills on time every month. This will show potential future lenders that you are responsible with your debt and will also help give your credit score a boost.

Your credit score is based on several factors, your payment history carries the heaviest weight with 35% of your score being influenced by it. And rather than just making minimum payments every month, try your best to pay your bills in full, which can help your score increase even faster.

Need to know how to rebuild your credit after a late payment? Check this out.

Keep Your Outstanding Balance Low

Your credit utilization ratio is also a key factor when determining your credit score and refers to the amount of money you spend relative to your credit limit. The higher this ratio is, the worse it will be for your score. But the opposite is also true. If your credit utilization ratio is low, this will be good for your credit score.

Ideally, your credit utilization ratio shouldn’t be any more than 30%. Keeping it under this threshold will show that you are not overextending yourself more than what you’re comfortable with.

Don’t Cancel Your Card Too Soon

It takes time for potential lenders to be able to see what your payment history is like and what type of credit you’ve been able to build for yourself. You can’t expect your credit to change drastically within a couple of weeks. So, if you’re opening up credit cards to take advantage of promotional deals only to close out your account soon after, you could be doing your credit score more harm than good.

If you must close a credit card, keep in mind that it can reduce the total length of your credit history. The longer you keep these credit card accounts open, the longer your credit history and the better your credit score will be.

Let A Secured Credit Card Help You

Secured credit cards can be the perfect financial tool for consumers with bad credit scores to use to improve their scores. They can also be ideal for those who have no credit at all and are looking for a way to build credit from the ground up. Whether you’ve got bad credit or no credit, secured credit cards can be easier to get approved for and can be used to your advantage to build a healthy credit score.

Is it better to have a bad credit history or no credit history at all? The answer is here.

With a good score, you can open up many more doors in your financial life. You’ll have an easier time getting approved for traditional loans, be offered lower interest rates, and even increase the odds of getting an apartment or a cell phone contract, all of which depend in part on your credit score.

By using a secured credit card responsibly, you can build credit or significantly increase your credit score. However, if you abuse your card and miss payments or rack up a ton of debt against your credit limit, the opposite effect will occur.

For more ways of improving or fixing your credit score, click here.  

Looking For A Secured Credit Card?

Our number one piece of advice is to be sure to apply for the right card and use it responsibly. That means making all of your payments on time (and in full, if possible), keeping your credit utilization ratio at no more than 30%, and do not take out cards just for their introductory promotions then close them out soon after. When used right, you can see improvements to your credit score in as little as a few months. If you’re looking to improve your credit score by using a secured credit card, we have a great option for you.


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Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!

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