- HOW important is to have an Exceptional Credit Score?
- DO you know the cost of the house or car purchase can drastically increase with a bad credit score?
- DO you know having an amazing credit score can increase the chances of your Success?
Importance of Exceptional credit Score
GOOD CREDIT becomes one of the best help when it comes to making a BIG PURCHASE like a HOUSE, CAR, RENTAL PROPERTY or STARTING BUSINESS. You can have a significantly lower cost of borrowing with an Excellent credit score which will make sure you will have lower monthly payments and you are paying off more money toward Principal instead of Interest. Secondly, it may allow you to borrow more money which gives you better options to choose a better location or a nice house or a better car.All I see better options.
5 main factors involved in calculating a credit score are:
- Your payment history
- Your used credit vs. your available credit
- The length of your credit history
- Public records
- Number of inquiries into your credit file
10 Easy Ways to have an Exceptional Credit Score
1. ALWAYS MAKE PAYMENTS ON TIME
Set up automated payments or at least make the minimum payment. It’s one of the main criteria and you should make sure you never miss credit card payments.
2. NEVER USE AVAILABLE CREDIT OVER 35-50% OF TOTAL CREDIT LIMIT
This is another very important factor to make sure you never use more than 35% of total available credit. In simple terms, if you have just one credit card with a $1000 credit limit then you should never use it over $350 each month. If your needs are higher than use Debit card or cash or try to get your limit increased or get another card. If you have two credit cards with a $1000 credit limit, it me you can start using up to $700 on any credit card. They always consider your total available credit combined.
3. ALWAYS TAKE ANY AVAILABLE PRE-APPROVED LIMIT INCREASE TO MAX
It was a while ago when my bank told me that I have a pre-approved credit increase available and I just took part in the increase instead of all thinking I don’t need that much credit anyway. How Stupid I was? It’s like a lottery when your bank tells you that you have a pre-approved credit increase. Just take it all because it helps you to stay within 35% usage and more unused credit helps to increase your credit ranking.
4. NEVER CLOSE YOUR OLDEST ACCOUNT
It’s possible that you may have opened a credit card a long time ago and you don’t use that anymore but remember banks like it when they see you have a credit account for a long time in good standing. The closing of the oldest account may wipe out your history and it can impact your credit.
5. NEVER APPLY FOR TOO MANY OR TOO FEW CREDIT CARDS
Banks are trick, they don’t like it when you have too many credit cards and neither when you have just One or Two. They think you are abusing or at risk when you got too many and they think they don’t know you enough to give more credit when it’s few. I like to have at least 3-4 credit cards with different banks, I won’t be using all of them though.
6. ALWAYS KEEP USING AND KEEP PAYING YOUR CREDIT CARD
There is a lot of people who are scared of credit cards and they think it puts them at risk. But you are at higher risk for not using them because it won’t build your history and banks don’t know you enough to have some faith in you. It can be simply linking some of the monthly payments like phone, Internet, electricity to your credit card and set up automated payment to pay credit card, as simple as that.
7. NEVER APPLY FOR UNNECESSARY STORE CREDIT CARDS
Have you seen someone standing near the store entrance asking to enroll for a store credit card for 15% off on your first purchase? It seems like they are in every store. It’s a big NO to these credit cards. DO YOU KNOW that you lose points from credit score every time you apply for credit? Is it worth getting that onetime 15% off to lose points from your credit score? Of course NOT.
8. NEVER GO SHOP AROUND FOR LOANS AT TOO MANY PLACES
Many times people try to get loans at many places around the same time which has a very bad impact on credit rating. First, your credit score goes down every time someone checked your credit and secondly, all institutions see that you are applying at too many places and your chances of getting that loan goes down. Specifically careful with the online applications, I have a friend who was looking for a car online and filling out applications without knowing that it’s hitting his credit every time. He ends up applying over 10 times and his chances of getting the car went down drastically and he lost his good credit.
9. MONITOR YOUR CREDIT SCORE ON REGULAR BASIS
It’s getting more and more common people identify getting stolen and hackers open new credit accounts to use it all and that has a big impact on credit rating. Credit rating goes down from Excellent to Poor within months, so it’s a good idea to have some credit monitoring subscription to get alerts for any such changes. Sometimes subscription is very expensive, so at least you should check your credit every 6 months or yearly.
10. PROTECT YOUR INFORMATION, ALWAYS BE CAUTIONS TO GIVE YOUR SSN/SIN
Most of the time it’s our stupid mistakes which makes it easier for hackers to steal our identity.
- Never throw documents containing your name, address, Birthday, SIN/SSN, Medical bills, Statements, Tax papers or account information in garbage or recycling, it’s best to shred such papers.
- Never give sensitive information on the phone to anyone.
- Never send sensitive information by emails unless it’s password protected.
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