5 Ways to have a Good Credit Score
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Keeping your credit core healthy gives a lot of benefits. Most of your financial approvals are based on your credit score and your creditworthiness. So maintaining a good credit score is essential for your financial well being. Lets see what are the top 5 ways to keep a good Credit Score.
Never be Delinquent on any Bills
Don’t miss paying any bills which is a biggest enemy to your credit score. Most of the missed bills can be settled without going it to collections. Once it goes to collections and marked as delinquent, your credit score most likely going to get a hit. So, avoid this at all cost if you want to keep a healthy credit score. In case if you missed it or even if it goes to collections, try to negotiate for a settlement to get that out of your credit report.
Try not to close your first Credit Card
One of the important factor in credit score calculation is the credit age. So the credit age for you is determined from the date you started building credit. Your first credit card would be the initial start into credit world. So, closing that credit card will reduce your credit age and eventually hit your credit scores. So, even if you aren’t using it much, try to keep your first ever credit card active.
Keep your credit utilization percentage to 30% or less
Credit utilization percentage is calculated dividing your total credit used by total credit available. In simple terms, if you use more than $300 on a credit card having a credit limit of $1000, then your credit score might go down. Remember, this is calculated based on each card and all card usage accumulated. Both of these calculation will be a factor of your credit score.
Have different kinds of Credit Card
Taking loans and paying it back promptly make you CreditWorthy which in turn gives a positive impact to your credit score. So if you have any existing debt or loans like Car Loans, personal or mortgage loans, try to pay it off. Paying off loans will have a good effect on credit score. It’s an important factor when you apply for bigger loans.
Why to Limit the number of Credit Cards
Total number of credit inquiries will also affect your scores. So within a short period of time, if you apply for too many credit accounts your score will go down most likely. Also less chances for approvals from financial institutions as you are applying for many credit cards in a short span.
I hope these tips were useful, informative and will help you for a better financial well being.
