3 Tips to Build Good Credit Score

A credit score is a number that evaluates the creditworthiness of any customer. Generally, lenders use credit scores to evaluate the probability that an individual will repay his or her debts. 

An individual’s credit score ranges from 300 to 850. It is considered an important part of your financial status. If your credit score is higher, the risk of not getting a loan is lower; if your credit score is lower, the risk of not getting a loan is higher. 

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 only one credit – Many users gather a collection of credit cards within their first year of using credit. Don't do such mistake – opening up too many credit cards too soon. The more credit in your cards means you’ll end up spending more. This will make harder for you to keep up with your balances and payments. Too many inquiries on your credit card can have a negative impact on your credit score. Credit inquiries can affect 10% of your credit score and opening new credit cards lower your average credit age, a factor that's also 10% of your credit score. 

2) Don’t forget to make your payments in time – Paying your monthly bills on time will help you improve your credit score. Remember, that all of your monthly payments are listed on your credit report, so they don't affect your credit as long as you're paying on time. But if you miss any of your payment, it can potentially wind up your previous bill. Don’t let negative accounts impact your credit score. A serious felony like a debt collection can be hard to overcome.

3) Use your credit limit in a small amount – 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.