In today’s society having a high credit score is very important and paying, as it affects us in different ways. It impacts the request to apply for a loan, home loan approvals, car loans, interest rates and also the car insurance premiums. It is difficult to exactly define a high credit score as a range from 675 to 719 is considered as good and a score above 720 is considered excellent. Although most people understand the importance of a good credit score but most do not know the best practices to be followed to help increase their score. The following steps can help to achieve a good credit score:-
1. Getting a secured credit card: – If one does not have a regular credit card he can start with by applying for a secured credit card. Secured credit cards are like regular credit cards, but they need a security deposit or a down payment to get approved. To star with this can help to build a credit history and once a successful track record of payments is established, it is easy to get an unsecured credit card.
2. Pay off Your Bill Each Month: Like it is aptly said that “Cut your coat according to the size of the cloth” the same holds good while using a credit card. It is important to only charge to the extent one can afford to payback at the end of each month. Not using the credit card is not the solution, but instead it is important to use it keeping within one’s means. It is advisable to use 50% of the credit limit instead of using up the entire credit allowed
3. Pay on Time: Paying credit card bills on time is by far the best thing to do, to push up credit scores. It should be kept in mind that late payments also affect credit score.
4. Avoid Applying for Numerous Cards and apply for a Loan: Although not major, but applying for multiple cards affects credit score. The best option is to use a single credit card and keep the balance low and make payments on time.
5. Check Your Progress: After every six months of regular payments, it is a advised to check credit scores, to ensure that there are no errors or omission in the same. Moreover having a fair idea of one’s credit score comes in handy while planning and willing to apply for a loan or making big purchases using credit cards or by means of personal loans.
In today’s world a high credit score is an asset as it helps in taking major purchase decisions like buying a house or a car. If one already has a credit card or is looking forward for applying for one then following the above steps can help build a high score. If the above steps are followed, then a lender will welcome such debtors and will also be ready to consider the interest rates.