How you use your credit card would expectedly have an effect on your credit score. This is inevitable because credit scores would greatly depend on your credit card usage and payments for your purchases as well. Because of this, it also follows that you have the means to use your plastic to the fullest so that you can obtain higher credit scores.
There have been a lot of tips circulating the market; one of which you have probably heard of already would be that you should not close any of your credit accounts, especially the oldest ones. Another is that it is discouraged to have a balance of more than 30% of your credit limit in any given month. If you do proceed to charge more than this recommended figure, then you know you should make online payments way before your credit card company generates a monthly statement.
However, there are also talks about the need to carry a balance of some amount for your card. In fact, people are saying that this is needed to maximize the use of your card.
In reality, there is indeed truth in these talks. You do need to carry balance on your card each month; however, you do not need to pay the interest on that balance. The best strategy that you can take on is to use your card for small purchases each month so that it would be easier for you to pay your balance in full when you get the bill. This is a sure guarantee to increase your credit score because this is a demonstration of wise credit usage and discipline when it comes to paying the bills on time.
It is actually better to let a little balance run on your account than to not owe the bank any money. Now owing any money does not really give your creditors anything to work with. You need to show them that you can pay off your debts in full and on time. To do this, you need to owe your creditors money. Of course, make sure that the balance you incur is just a small one so that it would not be difficult for you to make payments on time and in full.
The most crucial thing to remember is that you should make your payments way before your credit report is generated. This way, it would be plotted in your report that you were able to make the payments for whatever small purchases you have incurred.
content rss
