Our credit score can determine our eligibility in a variety of financial situations, including rates on loans and approvals for mortgages. Credit scores can range from 300 to 850. A good credit score is between 700 to 749 and an excellent credit score is 750 and up. Credit scores of 670 or above have higher likelihood of being considered creditworthy than scores that are lower than 670
What does it take to earn and maintain a good credit score?
Start by committing to these four habits in order to build or maintain your credit score:
Borrow What You Can Handle: Make sure the amount you want to borrow can be repaid without delayed or missed payments. Missed and even late payments can negatively affect your score. If the purchase you want to make on credit will take an extended period of time for you to repay, especially after the balance grows with interest, reconsider the purchase. Carrying a large balance for an extended period can have negative repercussions on your credit score.
Start Slowly: Limit yourself to one credit card if possible and consider only spending what you can pay off immediately when the bill is due. Be strategic about how much and what debt you enter into. Some people are tempted to open several different cards at once, but this can be an easy way to spiral into debt and harm your score.
Ration Your Borrowing: Push yourself to build an emergency fund whenever possible, to reduce the chance that you’ll have to go into major debt to cover an emergency cost. Avoid using your credit cards as an emergency fund. Credit bureaus reward people who show an ability to borrow with control.
Pay On-Time: Budget and plan for your due dates. To reduce the risk of forgetting to pay bills, schedule automatic transfers out of your checking account to pay down your owed balances.
If you want to improve your credit score by reducing your debt, but struggle to even pay down your interest, consider pursuing additional income. A second career can allow you to increase your earning power. As a result, you’ll be more likely to shrink and manage your debt, improve your credit score, and qualify for better rates down the road.
Learn more ways to improve your financial future at www.syncis.com/blog.