In order to build and maintain good credit, you must select, use, and pay on your credit cards, and other loans, wisely. Each step is important. Put them all together and your credit rating should rise. Make bad choices and you might hurt yourself in some surprising ways.

When applying for credit, only sign up for cards you’re comfortable using for years to come. Getting into the habit of always signing up for the newest card and transferring your balances from the older ones to the latest with the lowest introductory rate can seem smart if it saves you interest and lowers your monthly payment. The truth is, however, that the credit reporting agencies may not be impressed, especially if you close your older cards. Payment history counts when it comes to your credit rating, so you don’t want to close accounts that you have held open for many years. So, if you close your older card when you transfer your balances to the new one, you’re really doing your credit score no favors. Avoid this credit rating pitfall by choosing your cards wisely, to begin with, and sticking to them.

The oldest myth about credit cards is the idea that you should pay off your cards every month to earn an excellent credit rating. Set your own record straight! Credit reporting agencies like Equifax and TransUnion show the most favor to credit card holders who carry small balances on their cards month to month. This proves to the agency that you’re comfortable carrying and responsibly managing debt. Cardholders who follow this rule can watch their credit rating rise.

Surely you’ve also heard that making payments on time is a must. Unlike the old myth above, this rule is tried and true. Paying less than the minimum payment or making your payment late will surely bring your credit score down and may also saddle you with late fees that lead to even higher balances. Always make at least the minimum payment on time to avoid being labeled slow or delinquent. If you do have late payments in your credit history, try to stay current on your new cards for at least two years. The reporting agencies pay the most attention to the recent past, not ancient history so by getting back on track you can help your score go up.

To start building good credit with your credit card, you’ll need to obtain the card, use it, and make the first payment before you’ll see any effect on your credit score. You may have to sign up for a secured card at the beginning, which means you’ll be required to put money into an account controlled by the credit card company in order to obtain the card. In this way, any debt you incur using the card is secured by the funds you’ve placed in the credit card company’s account. Its a way for a creditor to take less risk when dealing with someone who has poor credit or no credit. A secured card is just as good as any other when it comes to building credit, though. Once you’ve made your first payment on time for at least the minimum required amount to the creditor, you should see your credit score start to rise in the following weeks. If you carry a low balance month to month on the card, your credit should improve markedly assuming you have no other problem credit accounts pulling your score down. Other ways to build credit from scratch can include getting a low limit store card or a gas card, just be sure that you can make the payments and stay current.

While many consumers misuse credit cards and make poor decisions about purchases, management, and payment habits, you can see that responsible use of credit cards can actually be beneficial and is nearly mandatory when it comes to building and maintaining a good credit score.