It is essential to have a good credit score. This factor can affect a number of day to day necessities, especially when applying for loans. Bad credit score means that your loan requests are more likely to get rejected. There are a number of easy practices that can help improve the overall standing of your credit record.
The credit score will basically depend on your credit card activities. So it is essential to keep a good track of your history and the transactions you involve your credit card on. Improving your score will mostly rely on this aspect. It may sound easy but the analysis that companies do is much more complicated.
Pay on Time
Your credit history will show a record on how many times you have made late payments. Always practice being on time and pay your dues on the due date or better, you can pay them slightly earlier. Paying your dues late a number of times will result in bad credit history eventually leading bad credit score.
Paying late tells the companies that you are struggling with your dues and you’re not viewed as a potential future costumer. Also, don’t be too early in paying your dues. This is not going to cause a very big decrease in your credit score but may also mean that it is not going to increase. Credit card companies depend on interests to get their revenue from.
If you pay too early then the amount of money that a company can take from you is too little. This will usually tell companies that you are playing it too safe. This is not usually a bad thing, but you might want to consider changing this if you are planning to dramatically increase your credit score.
Moderation is key to maintaining and improving your credit score. Most people use their credit cards to pay for literally everything. From expensive gadgets to just coffee alone. Multiple transactions will result to a very long list in your credit history. This will tell companies that you are too dependent to their service.
The decrease in credit score is not going to be that dramatic but would be big enough in the long run. Always keep in mind that credit cards are only there to help you when you are short of cash. This does not mean that credit cards substitute the idea of carrying real money.
Age is Key
If you are getting a rough time increasing your bad credit score always remember that getting a new one is not going to be any better. The older the credit card is, the better it becomes. Old active credit cards tells companies that you have been an active customer to their company and they might give you some incentives. This includes being slightly immune to some decrease in credit score.
This is the most unknown principle in maintaining a good credit score. Most people tend to give up on their existing cards when things get very bad. New credit cards are neither going to have a good nor a bad credit score. This means that you are going to start from scratch and this is going to be harder and longer.