Credit score plays important role in our lives. Whether to buy a home, car or get a loan from a bank. With a good score, we get more rewards and fewer interest rates. There are many benefits of having a good score. Companies will look at the score to find out whether you will be able to pay or not. One of the factors to know that you are paying bill on time is by good score. Lenders will assume you will more likely pay back and want to offer a loan who has good credit score.
In order to maintain or improve good score we can use below simple tricks:
1. Pay all your outstanding bills before the deadline: We need to pay bills before it's due so that there won't be a late fee and interest charge and in addition to that our credit score will improve. This is the number one rule for improving your credit score.
2. Increase your credit limit: You can check with your credit card company about this. Many credit card company allow to increase credit limit generally every 6 months if you have a good history of paying bills on time and using the card properly. By increasing your limit of spending will also improve credit score as this is one of the credit score components.
3. Limit to 2 credit card applications: Credit card companies offers different rewards to open an account with them. Such as providing 50,000 points which can be redeemed toward next purchase or even giving sign up bonus of $300. Please do not fall on this if you already have many credit cards. Always limit your credit card applications up to 2 every two years. Limiting credit card application will also help in improving the credit score.
4. Always budget before spending: Planning is very important in every aspect of our life. Likewise, we also need to think and make a plan of how much we are able to pay back and always try to spend only which we are able to pay. Doing this we won't suffer in high debt and won't affect our credit score.
5. Use less than 30% of your credit card limit: Always try to spend less than 30% of your credit card limit. Higher the credit utilization lower will be the credit score. So to be in safe side use below 10% of a credit card.
6. Link credit card with your spouse: If your spouse has a good credit score and opened credit card before you then it's better to open your card under spouse older credit card account. This will link your account with your spouse and can help to increase your credit score.
7. Diversify into different credit line: Generally, we have visa, discover, master card, american express credit card with us. We also need to open credit accounts on mortgage, car, gas station instead of only with the credit card company. Doing this will diversify your credit account and increases credit score.
I know with all the increase in the cost of almost everything it's hard to spend less and save more. However, if you try to implement above simple tricks of spending less on things we don't need which will definitely be all our savings and I am sure you will find a way to do it. Let's start from today to save and secure it for our future. Thank you all for reading this post.
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| Image Source: Credit Repair Expert |
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