Good Credit Score definitely make number of expenses a whole lot cheaper. From home loans to affordable car loans, the rewards of having excellent credit score is numerous. There are many benefits you can enjoy by having it. You can enjoy a lower interest rate on your credit cards and loans. You can also save your money on insurance and security deposits. But on the top it is all about how you use and maintain a good credit score.
7 Important Facts to Know About Your Credit Card Score:
The more you know about your credit score the easier for you to maintain good history. Payment history, level of debt, credit age, mix of credit, recent credit are five pieces of information that helps you to calculate your credit score. But remember that account over drafts or utility payment may not automatically help your credit score.
2) Try to Pay your Bills On Time:
Always make sure to pay your bills on time. Bills may be your credit card bills or your loans. Because certain bills may get reported to the credit bureaus while certain bills may not. If you have bad credit history, it may leave you fall behind. Even a small library fine may leave you behind unpaid. Hence try to clear all your bills on time and maintain good credit score.
3) Maintain your Credit Card Balances Low:
The higher your credit card limit, the worse your score will be. It is said that people maintain their credit score less than 30% are considered to have good score. Charging more than 30% of credit limit seems to be risky even though you pay them on time once the billing statement comes. At the end the card issuers report your balance and if it is high then your score will be affected subsequently.
4) Try to Manage your Debt:
Credit card balances is not only one concept that affects your score. The loan balances and lines of credit also impact your score. Too much debt can cost your credit score points, thus making it difficult for you to afford on monthly payments.
5) Do not Close your Credit Card:
Once you close your credit card, then your credit card issuer no longer send updates to credit bureaus. So your credit score formula places less weight on your inactive account. Closing your credit history will shorten your credit age and cause your credit score to drop.
6) Limit your New Credits:
Applying for new credit card? Remember application for new credit take your score to small hit. If you have high credit score, applying for new credit card reduces your points to 10%.
7) Keep Track of your Credit Report:
Beware of credit card fraud and identity theft. Just because you do everything does not always mean that everything else goes well. You also have to keep track of credit card frauds and also about thefts. So do check your credit report through the years and detect these mistakes as soon as possible.