Do Store Credit Cards Help You Build Credit? (2024)

FAQs

Do Store Credit Cards Help You Build Credit? ›

If you use your card every month and then pay off at least the minimum balance, or if possible, the total amount owed, a store card can be a valuable financial tool to build your credit history.

If you handle the account well, a store credit card has the potential to help you improve your credit score. There are restrictions, though, that you should be aware of before applying.

Since store credit cards have significantly higher APRs than general-purpose credit cards, carrying a balance on a store card can be extremely expensive. Only apply for a store credit card if you are able to pay off your balance in full every month.

Like other major store credit cards, the Amazon and Kohl's cards report to the three major credit bureaus every month. That will help you build credit history.

Some credit cards can build credit faster than others, though the difference is small. Credit cards with high limits and low fees can build credit faster because the more credit you have available and the less of it you use, the better it is for your credit score.

Yes. Just like a credit card, store cards can help you build your credit history. However, you have to make timely payments of at least the minimum balance, plus keep your credit utilization below 30% to positively impact your history.

Both the Capital One Walmart Rewards® Mastercard® and the Walmart® Store Card report your account information to all three major credit bureaus each month, and making on-time payments will improve your score.

As you can see, closing a store credit card can affect several factors that are used to generate your credit score. Unless you have a good reason to close your store card, it may be helpful to keep the account open.

Some store cards will approve applicants with scores as low as 550, which is considered poor. There is no defined range for a fair credit score, but typically a FICO score between 580 and 669 are considered fair.

What raises your credit the fastest? ›

Lowering your credit utilization ratio will often boost your credit scores, especially if your starting point is above the ideal 30% mark. There are several ways to accomplish this. You can: Pay your bills more frequently.

1. Pay on time, every time. One of the fastest ways to build good credit is by paying your bills on time. Creditors like to see a solid track record of responsibility.

You can build credit with a secured credit card in as little as one to six months, but it can take many months or even years to build a consistently good or excellent credit score. The length of time also depends on whether you're building credit from nothing or rebuilding damaged credit.

It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.

Just as store credit cards work in much the same way as regular credit cards, the same holds true for their impact on your credit score. If you regularly make late payments or miss payments, your payment history – which makes up 35% of your FICO credit score – will feel the impact.

Get a secured credit card.

Secured credit cards are designed to help you build credit if you would otherwise have a difficult time qualifying for a credit card. In order to be approved, you'll typically need to put down a refundable cash deposit. The amount of your deposit will determine your credit limit.

Store credit cards are commonly issued directly by retailers and aim to promote loyalty and repeat business at those individual stores. They frequently offer benefits such as discounts, rewards programs, or specialized financing deals, but can only be used when making purchases from the retailer that issued the card.