6 Easy Way To Build And Maintain A Healthy Credit Score
Credit score is a great determinant factor on whether or not you will be considered for certain financial transactions such has trying to rent an apartment or taking a mortgage for a new home. And if your credit is below average, most credit lenders are unlikely to approve your application for a new credit card and even employs also could be weighing a prospective staff credit card history in the recruitment process, therefore job hunters need to be very careful. Notwithstanding, to maintain a credit card is not quite difficult, you just need commitment, patience and consistency. These are six easy ways optimization of your credit card could be done, so that three digit number doesn’t hold you back from living life with total comfort.
1. LET YOUR ACCOUNT AGE Keeping a particular account for a long period of time helps to increase your credit age and build good credit. And also the longer u have had credit , the more it helps to build your credit score. Because building a good credit is a marathon and therefore with discipline, patient and building a healthy resowct for the power of your credit score will give u more chance to get approval for loans, mortgage and other valuables.
2.UNDERSTAND YOUR SCORE Knowing exactly where you stand is one of the first step to increase your credit score and this can be done by getting report of your credit card to see how it adds up from; TransUnion, Equifax and Experience who are the three credit card reporting bureaus even though they may have slightly different figures in there calculations.When your credit score is higher, the more attractive you are to the lenders. The risk scale ranges from 350 to 850, In which 350 is the riskiest and when you fall around 700 on the scale, you are considered to be within good credit range.
3 MAKE ALL YOUR PAYMENTS ON TIME Usually, it is not all payments you receive that usually enters into your credit report, so therefore when you are able to make your payments as early as possible, it will not affect your credit.You could prevent negative accounts and numerous errors from entering into your account also in other to build a very good credit score. Paying on time is very good because it also reduce the unnecessary increase in debt to be paid when you make payments early before it accumulates
4. DISPUTE ANY FORM OF ERROR. At the end of every year, calmly studied the report giving to you by the reporting companies to make sure it is totally free from any kind of errors or inconsistencies, this is because such errors may implicate you against fraudulent crimes or worst case scenario u could be implicated of identity theft when someone else financial figures is showing on your records. The kind of mistakes and record error to take notes includes; inconsistency in your past address, your SSN and the specific amounts owe to lenders which is also very important. A Fair Crediting Disputing Act gives about 30 days to make amendments of observed errors in an annual reports you receive and you do this by sending a certified mail attached with necessary documents to send a letter to the lender and the reporting company in question.
5. ONLY BORROW WHAT YOU CAN AFFORD.Having a credit card doesn’t mean you can necessarily buy what you cannot afford or something way expensive for your pocket that will be very difficult for you to pay. Before you secure a loan, it is always good for you to make a review of your financial income so that you will be able to know the amount that will be comfortable for you to pay back on a monthly basis and there for you don’t borrow more than you have budget for. When you learn the habit of borrowing what you can afford, even future lenders will know you as a responsible borrower and it also stands as the best way to build good credit.
6. PAY YOUR CREDIT CARD BALANCE IN FULL If what you are charging is not more than what you can pay, then you will not have problem paying paying your credit card balance in full. The habit of paying and clearing yoir debts totally every month shows you are very responsible and a good borrower and this is the kind of things lenders and creditors want to see in a borrower. And this will also improve your credit score since the large part of the credit score has to do with timeliness of payment and paying up your balances
Originally Published By:- www.thebalance.com
Image Credit:- CNBC.com