Your credit score evaluates your creditworthiness. Generally, lenders use credit scores to evaluate the probability that an individual will repay his or her debts.
A credit score is an essential factor in your financial status and can range between 300 and 850. Your loan will get approved easily if your credit score is over 720, but the rejection rate is more if your credit score is less than 650.
As you’re reading this article, you must be aware of the importance of maintaining a good credit score. In this article, we’ll share some tips that can help you with building a good credit score.
1) Start with a single credit card – Many users start using multiple credit cards within their first year of using credit. Don't make such a mistake. It can cost you more money while making credit payments as initially, you ended up spending more money on your cards, making it difficult for you to manage your balances and payments. Also, don’t inquire about your credit score again and again. Multiple inquiries on your credit report can have a negative impact on your credit score. Remember, credit inquiries can affect 10% of your credit score, and opening new credit cards reduce your average credit age.
2) Make payments in time – Paying your monthly bills on time will help you improve your credit score. Any delay in clearing your payments can affect your credit score. Don’t let negative accounts impact your credit score. A serious felony like debt collection can be hard to overcome.
3) Use your credit limit in small amounts – Maxing out your credit cards—or even coming close—is a big no! It’s quite irresponsible, especially if you don't have any plan to pay the whole amount within the month. Not paying credit card balances on time can ruin your credit score badly. Always remember to keep your balance below 30% of your credit limit is the best possible thing that you can do to improve your credit score.
If you need to know anything about credits and credit score, do let us know in the comment section below. You can also contact various banks in Stillwater.
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