Basically, your credit score is a mark reached at based on the information held by your credit card issuer. This information is usually on your credit report or your credit file. This mark varies from one lender to another based on the criteria a lender uses to establish a credit score. Generally, creditors arrive at a credit score based on credit history, amount owed and the newness of your credit card among other factors.
Credit score has a direct bearing on a number of things about your credit card. Your credit score determines:
- Whether or not a creditor can lend you money
- How much money a creditor can lend you
- The interest a creditor will charge on the money they lend you
- How much you pay in minimum monthly payments
- Eligibility for some insurance and mobile phone courier services
The credit score is also one of the things your financial consultants will look at before they settle on a credit card debt relief program to help you out of credit card debt.
Your latest credit report will usually be the most impactful document a lender will use when you request for a credit card loan because it gives a clear outline of your credit situation in recent times. It also gives a snippet of your financial foundation and how you make financial decisions.
If the reports shows that at some point you were skipped or were not consistent with paying your minimum monthly payments towards a loan, it will adversely affect your credit score and the creditor will view you as a high risk debtor so you’ll either not be eligible for a loan or if you are eligible they will charge high interest on the loan.
Some insurance companies and mobile phone carriers also use your credit score and credit history to determine your eligibility for their products. It is therefore important to check your credit report frequently just in case you have a negative review somewhere on it which you can get rid of.
Improving your credit card score
Improving your credit card score will not be easy, it’s a long journey which requires years of diligence and dedication. Erasing proofs of past behaviors is not easy and it won’t happen overnight. However, there are some tips which if you follow, you will effectively improve your credit card score with ease. On this post are tips which will help you be consistent with paying your bills and using your credit cards wisely to improve your credit score.
Assess your credit card debt
Debts affect your credit score directly. The more debts you have the lower your credit score is. If you ever default on your credit card debts, many lenders will view as a bad debtor and chances of them giving you a loan will be very low—which means you’ll have a low credit score. However, many debts can also build your credit score if you diligently pay back your credit card debts in time. In short, as you assess your credit card debts, you should be concerned about your credit history and figure out ways to keep the history positive—that’s the ultimate point of interest.
Communicate with your creditors
You having a good communication with your creditors will help you boost your credit card score. You may not see the need of having that good contact with your creditors but you need to know that whenever you are having a problem with paying your credit card debt or even having a situation that may be hard for you to keep up with your monthly payments just call your credit card issuer and explain to them about your situation and your monthly payment may be put on a extended payment plan until you recover from your situation. This will ensure that your credit history is always good, and this will keep your credit score high no matter your situation.
Be consistent with paying the existing debts
If you want to improve your credit card score you should make sure that you are consistent with paying off the credit balances on your credit cards. At least don’t ever default on the minimal monthly payment as per your agreement with the creditor. Whenever you can, exceed the bare minimal value, especially for the loans with high interest rates. The best way to do this is by increasing your income. Find ways to increase your income and use that additional income to pay off the credit card debts and in the process you will build a strong credit card score.
Create payment reminders
Reminders are great; they keep you focused on your goals. You can set a reminder to ensure that you always pay your monthly payments in time. At this point I imagine you already know just how much damage a default on the regular payments would do to your credit score so don’t take chances; set payment reminders and when they go off don’t rest till you make the payment. If you can, record your remission time limit on calendars or even your phone.
Keep away from new credit card application
If you want to improve your credit card score you avoid new credit applications considering that credit inspections and inquiries can spoil your credit score, in as much as you are in a credit repair mode.
Creating a new credit account may as well lower your average credit score. This is another factor that weakens your credit score.
Settle up your bills on time constantly
Paying your bills on time boosts your credit card score. You should have in mind that your payment records are the key factors in calculating and deciding on your credit score. Usually creditors refuse and may not want to lend money to people with a bad history on credit payment, for example someone with a history of delayed payments and also missed payments are always avoided. If you miss a single payment your credit card score can drop from 100 to 300 points, this will weaken your chances of you being credited in future.
However , If you delayed with some payments due to unavoidable situation where money was a problem you can bring back yourself into good books by breaking your bad spending and establish a good record by paying your bills on time all the time.
If you have any questions on debt management or need more information on how you can improve your credit score, feel free to get in touch with us today.