Using Your Credit Cards Wisely
Smart use of credit cards can contribute to a higher credit score. One misconception about credit scores is the less credit you have, the higher your score. Not true. A high credit score comes from using your available credit responsibly. Credit Cards – when not used properly – can tank your credit score. However, those same credit cards, when used to their fullest advantage, can add dozens of points to your credit score. We’ve come up with a few tips on how to use your credit cards so they add to your score, not bring it down.
- Pay On Time – Yeah, we know, this sounds rather obvious (trust us, you’d be surprised). Failure to pay your credit card on time every month is one of the single biggest contributing factors to dents in your credit score. Not to sound like your dad when you brought home a bad report card, but, get your act together! If you can only afford the minimum payment, pay it. However, if you can forgo a meal out, or maybe skip date night or a night out with your friends once a month, pay as much of your high balances down as you can. The most important thing, though, is to make sure you pay on time, every single month.
- Reading – Brew yourself a nice cup of tea, wrap your feet in a blanket, and curl up with a nice long Policy Agreement. Yes, just like iTunes gives you an update every other day that you never read yet always agree to, your credit card agreements are likely the same. Why all this laborious reading? Because every credit card is different, and not all have the same charges and fees. Some cards charge annual fees, some charge for balance transfers, some charge for cash advances. Some even let you charge over your limit so they can charge you a fee for exceeding your limit. Choose credit cards that match your spending behavior and reward you for it.
- ID Theft and Fraud are Still a Thing – While the industry has gotten considerably better since the early 2000s as far as credit card fraud and Identity Theft go, it still happens with unfortunate frequency. While you, as a cardholder, aren’t responsible for charges made without your knowledge, it can lower your credit score for multiple months until the problem is resolved, especially if an account was opened without your knowledge. The best way to safeguard your information (and your credit score) is to monitor your credit on a monthly basis. Read your statements to make sure nothing is out of the ordinary, and check your credit report every month.
These are just a few examples of what you can do, as a consumer, to use your credit cards as a tool to a higher credit score. National Credit Care is home to the best credit experts in the country; all of them waiting to help you maximize your credit score.