On paper, Americans’ credit card use and debt appears to be headed for disaster. Nearly one-third have credit card debt that exceeds emergency savings. Four out of 10 carry credit card debt, and the average total is about $5,700.
For people who may already be struggling with too much debt, a poor credit score may be closer than they think — by leveraging a late bill payment or taking on a new credit card to help bridge a gap. On the other end of the spectrum, people with no credit history may be unsure what to do to build a solid financial foundation that includes a good credit score.
The steps to either building a credit history or improving a credit score aren’t too difficult, but they do take time. To build a credit history, start by regularly and fully paying bills, every month. You may also be able to secure a positive credit history by opting for a secured credit card; this backs up your credit card use with a cash collateral deposit. To improve a credit score, you must also prioritize bills as well as existing debt and limit any additions to your credit — new applications and cards, for example. Learn more with our helpful steps.