How To Improve Your Credit Score
Having a good credit score is very important. Because it’s dependent on your future. If you would want a loan or get a good job, it all depends on your credit score. There are many ways to improve it. Losing your points is a lot easier than gaining them. So one needs to be very careful when using it. It’s not similar to using a debit card. It is money that you don’t have. The FICO Score should be anywhere above 700 points for a good score.
So here are 5 points you need to follow to improve your credit score
1. Pay your bills on time
Only spend the amount of money that you can afford to pay back. Because if we don’t pay back on time. Your credit score will be decreased drastically. Normally, a credit card company will give you 15 to 20 days to pay your bills. In any case of emergency where you cannot pay it. Call your credit card company and tell them your issue. That way they will understand and won’t put a bad mark on your file. Pay your bills on time each month for a few years. Your credit score will increase by a lot. Then you can apply for loans for a smaller interest rate. Everything is interlinked.
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2. Use your card correctly
Even though your credit card company gives you a large limit to use, you should never use the entire amount that is present. If you do that, the company will think that you are in a financial issue. They might drop your credit score. The standard rate is to use only 30% of your credit card limit. So if you have 10000 dollar limit, you should use only 3000 per month. This will have a huge impact on your score.
3. Don’t use your card at an ATM
You might be able to use your card at an ATM, but there will be a large fee when you withdraw cash. You can use your debit card at the ATM which is a lot better. There won’t be many fees and it’s a lot easier. You should use your credit card only for paying bills and spending money.
4. Don’t use too many cards
Always try to keep the number of credit cards to a minimum. Some people use many credit cards and rotate them to pay their bills. This is not advised. Try to keep the number of cards you have below 5. That way you can keep track of the applications and your spending. Having many cards might confuse you on which day to pay which bill. And if you miss it, it will be a problem for you.
5. Regularly check your credit report
Even though you might be paying your bills regularly. Don’t forget to check your credit report. There might be times when you miss some critical error. Without you knowing, it will slowly decrease your credit score and cause an issue. And it might be too late before you can make any changes. So by checking your credit report regularly, you can see if there are any changes and what to do.
And also don’t forget to take precautions when getting a new credit card. You should always go through all the terms and conditions present. Because there might be a small line that you might not read, that can be a day and night change. And take the opinion from your advisor on which card to get. And always go with the reputed companies. If you go with a smaller one just because there is a higher limit, you might not know their conditions and requirements. So by going with a reputed company, you can have trust that no mysterious activities are going on.
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