There are many ways to improve and maintain your credit score. As maintenance of credit score is very much essential for a user to get approval for a loan or to get approved for a credit card. Whenever it comes to the world of credit cards the credit score is the major point which is been concentrated both by the issuer and the consumer, but why? Because credit score is the gateway to get approved for the loan with lower interest rates and can also get approved for a credit card. That is why the credit score is very much important in the world of finance so to maintain the credit score the consumer must follow some steps that will help maintain and improve credit score to enjoy the benefits.
STEPS TO MAINTAIN GOOD CREDIT SCORE
When it is time to pay off debts consider all your debts alike
- Be it a revolving debt of the credit card or the installment or tradeline debt f mortgages, treat both the debts equally as credit score considers both the debts to compute your score.
- Never neglect any kind of debt, be the debt with the lower interest rates or higher interest, debt is always a debt be it small or large, figure it out, so you could come out as soon as possible from the trap of debts to maintain and build your credit score.
- Repeated or having a regular balance on your credit card will lower the credit score and will not allow you to get approved for a loan or other credit card options.
- Yes, we always do not have a constant financial situation, but you manage according to your income and plan and try to pay off as much as you can to clear the debt in this way the interest rates will be at the better points and you will also be towards the debt clearance side soon, never pile up your debt, remember slow and steady win the race.
Do not apply for new credit cards
- Applying for a credit card is followed by the hard inquiry of the issuer. This hard inquiry will hurt your credit score.
- When you apply for multiple and new cards that any inquiries will take place and that will affect your credit score.
- Apparently, a new credit card application accounts for about 10% of the applicant's credit score. So do not apply for new credit cards.
Do the full payments or at least pay off the minimum?
- Debt is a trap that comes s with the interest to get away from this trap, try to pay the full or maximum to overcome the debt.
- If you could not makeup to pay off full, then pay off how much you can, and later in the next payment try to pay more. In this way, your debt will be decreased also the interest rates will also be lowered.
- Be it minimum or maximum you have to pay, but never skip the payment be it a small debt or large one if you couldn't clear the debt soon you will end up terribly.
Maintain longer credit history by keeping your old accounts open
Longer credit history accounts for up to 10% of the consumer's credit score, so keep your old credit cards open rather than closing them, this will benefit you to maintain the credit scores.
Regularly check your credit reports and examine them for errors
Errors on credit reports may hit your credit score, so get your credit report check and contact the issuer and discuss the errors and resolve it. You can get the credit report for free from TransUnion, Experian, and Equifax.
Do not keep balances on your credit cards
Keep a limited number of cards that you can handle and do not keep balances on your cards, clear them all, and stay away from the nuisance of balance. Because having a balance on your card may hit your credit score. To avoid such problems, get a balance transfer card so that all the monthly payments can be combined into a single card.
Contact your issuer to solve the problem
Whenever you face a problem in your financial situation, try to contact your issuer, explain to them, and get the payment solution, and negotiate to get lower interest rates. It is better to make an alternate situation than making your situation worse.
Live within your credit means
Never get into temptations to go beyond your credit limit. That will end up as a debt which is a huge trap, and you will end up long to clear that off and will be paying more than the actual in the form of interest. So, live within your means to avoid such disasters.
The consumer always pays every bill on time
- Always pay your bills on time, make it a habit f every time. Because of the payment history of the consumer account about 35% of the credit score, so make sure you pay off your bills on time that is every time.
- In our busy lifestyles, we may forget about the bills and their payment sometimes we may miss it, ]to avoid that keep a reminder to pay the bill, with that, you will not miss the payment and that will also not hurt your credit scores, instead, it will boost your score.
Importance of A Good Credit Score
In today's world without any credit card, life wouldn't be that easy the digital transactions and the convenience they offer, and to get approval for a loan or anything that is related to finance, a good credit score matters the most. Good credit history is a must to make you better creditworthy so you could get chances of avail loans and credit cards. But all these can be granted with only one magic wand that is the Credit score. Credit score plays a major role when it comes to getting a loan or to get any credit card. Let us know how does the credit score affect.
Loan
A consumer with a good credit score will get approved for a loan and will not get approval with a lower score. A good credit score will convince the lender for your loan approval that you will be able to repay the loan.
Visit abroad for a professional or educational purpose
Whenever you go out of the country, if you have a good credit score, then that particular foreign county you are at, will grant you a credit card or any loan if not they will reject it and that will be unrewarding to you.
Lower interest and higher limits
A good credit score helps you get a loan at lower interest rates, a minor change in the interest rates brings out a huge difference. The consumer can avail of loans at lower interest rates with a good credit score. Also, you can avail of loans with higher limits.
Benefits of A Good Credit Score
A good credit score helps you benefit the following-
- Loan Approval
- Lower interest rates
- Higher limits with the loans
- Credit card approval, etc.
As we know how important is a good credit score, tr to build healthy financial habits in your lifestyle, the above financial habits are the best way to get a good credit score to enjoy the benefits that come with the credit score.