6 Sure-Fire Strategies to Catapult Your Credit Score
The first thing that comes to mind when most people think about their credit score is a big red number on a piece of paper. While this may be true, the reality is much more nuanced and complex. The truth is that your credit score plays an integral role in determining whether you can get approved for loans, what interest rate you will pay if approved, and even how much you will pay as a down payment. There are 6 sure-fire strategies to catapult your credit score into the stratosphere—and we are going to go through each one of them right now!
It is important that you know your credit score. You can use Credit Sesame to get your FREE Credit Score.
Follow the following tips to avoid spending a lot on fees and interest while trying to boost your credit score:
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1. Why Is Paying Bills on Time Important?
You don’t want to be that person who always pays the minimum balance because you’re being a cheapskate, do you? It’s better to pay your bill on time and not have late fees. For example, if you had $500 credit card debt with 15% APR, then making just the minimum payment of $20 would result in paying a whopping $595 over two years!
Credit cards are great tools to have in life because they allow you to purchase items without having any cash on hand. The downside is that if you end up spending too much, you could end up with a large balance at the end of your billing cycle.
However, making larger payments instead of smaller ones can be beneficial for those who cannot afford it all at once and still want their credit score intact.
Helpful Tips:
- Credit cards are fantastic tools for people who need them; however, failing to pay off the balance in time may result in poor credit scores.
- If a person is unable to make larger monthly payments than usual or consistently pays late on bills, then they will risk damaging their credit score by using their card excessively.
2. What should you try to keep the balance below on your existing credit cards?
The generally accepted convention is to keep your balance as low as possible, usually less than 30%. When your balance is low when compared with your credit line, you’ll get the highest score. It would be best if you learned to balance things up when using your credit card. Only make a large purchase if you are going to make a significant payment to cover the expenses.
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3. Read the fine print on Rewards Cards
One way credit card providers compensate for cash back and rewards is to charge higher APRs and fees. This is because credit cards that offer rewards generally have a higher APR than those with no rewards.
Additionally, since the APR is usually not disclosed before you are approved for the card, it can be difficult to know if you will make enough purchases on your credit card in order to offset the fee of interest or not.
So even if you do qualify for some type of bonus offer from a company’s points program, it may be worth reconsidering other options first unless you feel confident that you will pay off your balance at the end of every month before incurring any interest charges.
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4. Is Having Multiple Credit Cards Good or Bad?
There are a number of drawbacks to owning too many credit cards, which is why it’s best to keep your collection simple. First, the more you have, the likelier it becomes that you may forget one or two payments for them.
This will make all of your accounts late and cause a major headache in terms of catching up on missed payments. Second, if you do miss those payments then chances are good that they’ll charge high interest rates for every month they’re overdue (sometimes as much as 30%).
5. Be Careful with Balance Transfers
Balance transfers can sound like a good idea, but you need to be careful. Most creditors will always charge transfer fees for every transfer and that could negate any benefit of going with a card with lower APR or fees.
6. Avoid Cash Advances
The problems with cash advances are that you will have to pay higher interest rates, pay a fee to advance, and make larger monthly payments. There’s no win in that. Unless you really need the money, avoid cash advances.
In conclusion, You can avoid all the hassles of credit card debt by following these simple guidelines. Always watch your spending and have at least two months’ worth of expenses saved up.
Any time you make a purchase, plan out when to pay it off – if you don’t know what day it is due on, it’s easier to forget about paying and let interest rack up.
We hope this blog post about “6 Sure-Fire Strategies to Catapult Your Credit Score”. Remember, It’s never too late to take charge of your finances. Let us know what you think in the comments below.
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