Earning Great Credit Scores
People with great credit scores have earned them. How? Below are some reasons and ways you can improve your Credit Score.
1. Never Pay Cash
You want every purchase to count and a purchase doesn't count unless the three credit bureaus know about it. The only way to make sure thy kno how much money you're spending is to put everything on your card(s). Rather than deposit your paycheck and spend, charge the purchase and pay it off with the money you deposited from you paycheck. It pays off big with the added security and boost to your credit score that credit cars provide.
2. Never Use a Debit Card
Debit Cards provide you nothing that a credit card won't, and credit cards will build your credit score. Furthermore, if someone steals your credit card, you're protected against fraudulent purchases, while with a debit card, you're out of luck! People with great credit scores take every opportunity to build tehir credit. Of course, whether your score goes up or down is dependent on how you pay back your credit card balance.
3. Pay Off Your Balances
People with great credit scores generally don't carry high credit card balances. The easiest way is to make sure you don't carry ANY balances. You'll obtain the best cresit score if you make sure that you're using the smallest portion of your potential limit - which means "ZERO". People with great credit scores make sure they use their cards, but pay off balances every month.
4. Put Yourself in the Bill Paying Schedule
In order for credit bureaus to reward your spending habits, you have to pay your bills on time. Its not good to pay your bills late. In addition, you will likely be charged a late fee. However, it won't affect your credit score unless you paly more than 30 days late. The easiest way to stay on top of paying bills is to pick one day every month...and pay all your bills that day.
5. Consistently Request Higher Credit Card Limits
You will have the best credit score if you keep the balances of your cards below abuot 35% of the limit of your card. People with great credit scores don't habitually spend over 35% of their card limit. However, use extreme caution that you do pay your balances off and do not let the balances creep higher and higher.
6. Never Close a Credit Card Account
The credit bureaus take into account the age or you credit lines. Many times, people with mediocre or low scores will pay off a card they've abused and close the account because they subconsiously think it was the card's fault they let teh balance get as high as it did. That is NOT the correct thing to do. That card has a history behind it and you should use it to your advantage. You've shown the bureaus that you're willing to borrow a large sum of money and then pay it sown to zero. People with great credit scores NEVER close credit card accounts because they want to show they ahave a long history of properly using credit.
7. Never Rent
Your home is probably your biggest purchase in your life, and is the purchase that can make the biggest impact on your credit score. Whey you purchase a home, you're showing the bureaus that you can consistently budget yourself to pay a large portion of your income towards and account on a monthly basis. When a first time home buyer finally closses on their home and pays the morgage on time for a few months, they will see their credit score go up about 50 points - and sometimes higher.
People with great credit scores haven't achieved anything too terribly difficult - they've just adopted some fantastic spending habits. They have demonstrated that they are responsible, and pay their bills...on time...consistently.