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10 Healthy Ways to Build Credit

Get Your First Credit Card
Remember, it's imperative to pay credit card bills on time.
Remember, it's imperative to pay credit card bills on time.
Jeff J. Mitchell/Getty Images News

If you've gotten your feet wet with a secured credit card or retailer card and have proven that you can pay your monthly balance on time, it's time to take the plunge. Responsible credit card use is one of the quickest and most effective ways to build a solid credit history.

An unsecured credit card is a "revolving" line of credit. This means that the lender sets a credit limit and allows you to continuously borrow and pay back your balance as long as you stay under that limit. Every month, you're required to make a minimum payment. Any balance that you carry from month to month will be charged interest.

To build healthy credit with a credit card, you must follow one simple rule: Always pay your monthly bill on time [source:]. If possible, pay the balance in full every month. If not, at least make the minimum payment.

There are other credit card traps that can affect your credit score. Try not to carry a balance higher than 30 percent of your credit limit [source: Pulliam Weston]. FICO frowns on borrowers who have a high debt-to-credit ratio.

It's also better to stick with one credit card rather than constantly trading in for a card with a lower interest rate. Fifteen percent of your credit score is based on the length of time you've maintained a credit account [source: AuWerter].