A good credit history is essential for a healthy financial plan, especially if you’re not a massive wealth holder!
If you think your credit card debts are increasing month after month, then there may be some habits you’ve unknowingly developed that are hurting your credit score instead of improving it.
But don’t you worry! To help you out on this, I have a few tips for you.
By implementing these you can notice a drastic change in your credit card status from the very first month itself!
#1. Be sure of the company
Credit card companies are quite picky about the applications they approve. People with bad credit are at risk of defaulting on their credit card debt.
Your card request can even be rejected if you fill the form without knowing where your credit stands or what the card issuer requires!
Okay, so what can you do?
You can check your credit score before applying for a credit card. And if your score comes below 650, it will be better to apply for a secured credit card to help build your credit score!
Here’s one precaution, if you keep applying to different companies and getting denied every time, those inquiries will compound and hurt your score even more, so avoid filling forms unknowingly.
#2. Stick to a budget
There can be 2 major issues if you fail on this!
First, you’ll have to face a tough time building the emergency fund. And secondly, not having a fix budget can make you go easy on overspending.
This will create a situation where you’ll be borrowing money even when you don’t actually need to.
Making a budget may sound ridiculous but once you get started even small, you’ll find that a budgeting plan does works!
#3. Look after your accounts
If you don’t have a insight on your credit score you must have, because keeping an eye on your credit score could play a major role in your financial plan.
And you know what, you don’t have to worry about how you’ll be able to monitor your account, there are several free credit monitoring services that can help you keep track of your score pretty easily! And that too including Credit Karma and Credit Sesame.
Isn’t that great! You can also get access to free copies of each of your three credit reports each year at AnnualCreditReport.com.
Don’t put yourself back on taking advantage of this opportunity, look for anything that’s out of order & correct it. If you find something, you can also report it to the credit bureaus.
#4. Always stay below limits
Till now you know how important it is to keep your credit score in shape, but the question is what should be the ideal limit usage Percentage that can provide you a better credit score?
Using less than 30% of the limit on every card will be great. The lower your balances, the more your scores will benefit.
You can also download your issuer’s smartphone app to track your spending quite easily.
Check your balance when you have some time to kill and make an extra payment if it creeps too high!
Credit cards can be great financial tools if you use them responsibly. From earning rewards on your everyday spending to building your credit with a positive payment history, it can give you a ton of benefit on deals!
And now implementing these great habits will help you build a healthy credit score, which in turn allows you to move on to more serious financial goals like owning your own home.
So, all the best for your smart financial growth!
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