Credit Report Q&A

Can I build a good FICO score if a charge card is my only credit account?

Yes, anyone can build a good credit rating by using a charge card. First let's clarify what we mean by charge card. Many people use the terms credit card and charge card interchangeably, but there are important differences.

Credit card
In general, a credit card lets you make purchases for which you are billed later. Most credit card accounts allow you to carry a balance from one billing cycle to the next. However, you will usually have to pay interest on that balance. You likely also have to pay at least a certain amount of your balance each time you receive a bill.

Charge card
A charge card is a specific kind of credit card. The balance on a charge card account is payable in full when the statement is received and cannot be rolled over from one billing cycle to the next. American Express and Diner's Club are two well-known organizations that offer charge cards.

So what does this mean for your FICO® score? There are many ways to build one's FICO score over time. Credit cards in general have a strong influence on the FICO score calculation. Charge cards can be just as effective as any other credit product in helping consumers establish a credit history.

Whether you have a credit card or a charge card, the most important factor in building or improving your FICO score is using credit responsibly. That means paying your bills on time and using your credit only when needed. If you can do those things consistently, you should be well on your way toward maintaining a good score.

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Credit card ratings: Editors from CardRatings.com rate credit cards objectively based on the features the credit card offers consumers, the fees and interest rates, and how a credit card compares with other cards in its category. Ratings vary by category, and the same card may receive a certain number of stars in one category and a higher or lower number in another.

The ratings are the expert opinion of the editors from CardRatings.com, and not influenced by any remuneration their website may receive from card issuers.


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