Love them or hate them, credit cards are a huge part of millions of American lives. Most people hear the horror stories of mounting credit card debt, but in reality, credit cards can be good if handled properly. In this article, we will be discussing how credit cards may actually help you going into the future with building your credit score.
What is a credit score?
A credit score is a rating that is reported by the credit bureaus. Your credit score is made up of many factors, but a couple of really important factors are revolving utilization percentage and consistent payments. If you are hearing the term revolving utilization percentage for the first time, it is the percentage of the amount of credit being used compared to the amount of credit given. An example of revolving utilization is that if you have a credit card with a limit of $1,000 and you use only $300, then your revolving utilization percentage would be 30%. Many experts say that you should try to keep your revolving utilization percentage between 10% to 30%. If your credit score is between 740-850, you have a really good credit score, if lower than 580 your credit needs some work. Credit scores are mainly there to allow lenders to assess the risk of the borrower. In theory, the better credit score a person has, the less of a risk they are of default, which can give the borrower better interest rates and terms.
How can credit cards help?
One of the best ways to use credit cards to help your life instead of hurting is to use them to build your credit score. If your credit score is very low at the moment, then these tips may help get that score up. The first thing you should do is look at your current revolving utilization percentage. If your revolving utilization percentage, also known as the revolving utilization ratio is high, then it would be a good idea to pay some of those credit cards down. You should try to keep your total revolving utilization percentage around 10%-30% or can pay them off completely each month. The next way to use credit cards to benefit your credit score is to make consistent payments on time each month. When you make consistent on-time payments on your credit card bills each month, you will be slowly building up your credit over time. These two tips can really help with increasing your credit score over a long period of time, especially if done consistently. When paying your credit card bills each month, make sure to pay the full monthly payment amount, if you pay less than what is required by your lender this may have a negative impact on your credit score.
How can I repair my credit fast?
As you probably already know, having a good credit score is very important in America. When trying to buy a home, car, or get a loan, lenders will be running your credit to see if you are a good candidate for them. If your credit is currently low or you want to get it higher for an upcoming purchase, we are here to help. Feel free to give us a call to schedule an appointment at (727) 250-2598 or visit our online website at Super Credit Repair for more educational information about ways to help improve your credit score.