Learn 2 Secrets to Improving Your Credit Score

your credit score

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So what is a good credit score? Shoot for 850, settle for 800. When your score is in the 800’s creditors seek you out because they know you are at the top of the risk scale. Your score proves that you will be low maintenance; you pay your balances off, pay your bills on time and won’t cost them money. It is not impossible to achieve a high credit score; let us show you how.

Secret #1 – Avoid Balances

Carrying credit card balances is a no-no; they damage your credit score. When you pay your credit card balances in full every month instead of just paying the minimum balance due you show the credit card companies that you are financially responsible. Credit card companies want you as a customer because you are a good risk and your credit score will prove it.

How To:

The absolutely best way to avoid credit card balances is to use your credit cards for purchases that you can afford to pay off each month. A good rule-of-thumb is, if you can’t afford it, don’t buy it.

Secret #2 – Limit Usage

Limit your credit card usage, period! One third of your credit score comes from what is called your “credit utilization ratio”. This is the amount of credit you use compared to the amount of credit made available to you. Credit card companies consider 10% or less to be a good credit utilization ratio.

How To:

The way to keep your credit utilization ratio low is by limiting the amount of credit you use or increase the amount of credit made available. The easier of those 2 options is to limit your credit card usage. Accomplish that by limiting your credit card purchases.

Shooting for a credit score of 850 and settling for 800 is not a difficult task, people just make it seem difficult. If you analyze your spending habits, cut back on your spending and limit the use of your credit cards you will hit a score in the 800’s. Good luck.