The use of credit cards is one of the fastest and fastest ways to create credit. But if you rebuild your credit score or from the beginning, it can be difficult to be approved for a credit card in the first place. And when you have a credit card, it is easy to hurt your credit score and make it worse than before you start. This is especially true if you don’t know the best ways to manage your credit cards. Fortunately, learn how to manage your credit cards is not the rocket science. By taking a few simple steps you will be on their way to a better credit score and a brighter economic future. Check your credit counters types of credit cards that you can apply depends on your credit score. So before you start applying for credit cards, it is useful to know what your credit score so you can apply for the links. Discover is one of the many credit card releases that offer free credit monitoring tools for someone who records, whether cardholders. The Discovery service provides a version of the FICO credit score, which most lenders use. You can use the service to show your current credit score. According to Experian, one of the three headquarters that collects and evaluate consumer credit information can be classified as follows:
Very good: 740-799
Very poor: 300-579
Use this information to limit which cards are best for you. For example, if you have a “exhibition” creditcore (580-669), you can save time and hard investigations on your credit report – waiting to request better credit cards until you have built your credit.
Understand what you get in a credit score, your credit card consists of different parts, which can each influence in different ways. According to Fico, that’s what goes on your credit:
Payment History: 35% Sumas: 30% Credit length History: 15% New Credit: 10% Credit mix: 10% These are large categories, and there are different ways in which everyone can influence your credit score. For example, while “global debts” form 30% of your total score, Fico will actually consider what debts you have different. It will look at how many debts you have taken on the whole, how much your available credit you use, and how much you still owe to rolling debts (credit cards) and delivery loans such as student loans and mortgages when calculating your score.
It sounds in confusion first, but there are also good news for you: it means that you have many options to improve your credit score.
Consider a secure credit card that you have a bad credit (or no credit), one option is secure credit card. These are almost available to everyone, but there is a catch. You must prevent a refundable deposit to open the account, often from a few hundred dollars. The deposit is usually also your credit.
Opening of secure credit card and management can help almost every aspect of your credit. For example, if you do all your payments in time, set a track of positive payments. And if you like your card long enough, you develop a long credit history.
Secure credit cards often contain extra costs that standard credit cards have none and higher interest rates. But they are real credit cards and help you build credit.
Once your score is high enough to be approved for better cards, consider closing your secure card if you want to save money (your deposit is reimbursed if your account is full). Your Secure Credit Card publisher can even invite you to update your card to unsafe credit card after period – and refund your deposit.
Avoid getting too many credit cards
Can be tempting to join many credit cards, especially with the rewards and special offers for financing in the store. Although nothing is wrong with the opening of more than one credit card account, there are no simple rules on how many cards are too many. However, it is definitely the point when managing multiple accounts, there are more problems than it is worth it. If a new credit card will tempt you to buy more than you can pay, or if you may have trouble remembering making payments for the new card along with the rest, do not open it.
These things will only hurt credit than helping it. Furthermore, each time you open a new card, it will be listed as a request for your report that can drop your score for up to a year. Always make your payments in the time for the biggest factor that affect credit, make your payments in time. Only a missed payment can have a significant impact on credit. Even worse, the brand will remain on your credit report for seven years, even though the negative effect will disappear for a while. The good news is that you can totally avoid missing payments by doing to make these payments on time, every time. One trick is to set up autopay on your credit card account for the least minimum payment in each month. Keep your balance low or better, non-existent The second biggest factor that affects your credit score, how much debt you have, especially in relation to your available credit. This figure is known as the credit votient, and it’s just a measure of your combined credit card balances compared to all your credit available. For example, let’s say you have two credit cards, each with the $ 5,000 border. If you have a balance of 1. $ 500 on one and $ 3. 500 on the other hand, your credit rate is 50%, because combined balance is $ 5,000, and combined limit is $ 10,000. Most credit experts recommend keeping credit consumption below 30%. The lower, the better – and the best, if you can completely pay the balance, and do not blame debt. You can do this just loaded what you can pay every month. You can also do more, smaller payments each month to keep your costs under control and avoid any surprises, monster invoices at the end of the month. To do that will give an impulse to your credit and you will not be interested, if you pay your balance last every month.
Save your old credit card openthe length of your credit history is a relatively small factor to determine your credit score, but it’s important yet. To calculate this factor, credit score models will take the average age for all your accounts. This calculation means that by keeping your oldest credit cards open, you can hold a long credit history that will increase your credit score. If you close these old credit cards, your credit history will be short and the score can fall. Of course, there are also times when it is still worth closing an old credit card. If it has a high annual fee and you do not use it anymore, close it. And if this old card keeps you updated some old, bad spending habits, then you closely close it. Keep the emergency funds often fall into credit card debt because life’s surprises appear, and it’s just easier to put expenses on credit cards and pay them later. But too many people, “when” never happen, since crises begin to work, and these new expenses stick to the old ones on the credit card. This use gets your credit card balance to be swollen, which is worse about using, and it leads to a lower credit card. The best way to break this cycle is to keep a specific emergency fund. So you can use your credit card to cover the crisis costs if you want (especially if you earn rewards from it), but you can also pay the costs immediately and stay outside the debt cycle. You can use credit cards to build credit card credit cards to build credit is a double sword. If you use it well, you can accelerate the credit and unlock the doors that have not been open before. But if you are not so good at managing your credit cards, it can damage your credit score even more. It is important to be honest with you about this, you can use credit cards responsible. If you are, you will be good on the way to better credit.