If you are an American consumer, chances are you are well versed with the concept of credit scores and how they affect the ability of consumers to get credit and loans. Your credit score number ranges from 300 to 850. This number will indicate to your creditors how much of a risk you are if they take you as a client. The lower the score, the riskier you are. The higher the score, the better.
Generally, a credit score of around 750 or higher is preferable. With a credit score that high, you can easily apply for loans and have them approved. If you have a lower score, creditors are going to be much less welcoming. You will have a tough time getting your loan approved and, if it does get approved, you can expect high interest rates and fees.
Obviously, you need to do as much as you can to get your credit score up. Read on to know a few tips to help you achieve that goal:
It is common knowledge that having little to no balance on your credit card will gain plus points for your credit score. So always plan to pay off your balances every month. Every time you charge something on your plastic, always have a plan to pay it off when the bill comes due. You should also keep an eye on your bill deadline. Aim to pay at least one day before the deadline. You might run into an emergency on the day of the deadline and not make your creditor's cutoff hour. This will mark you as a delinquent borrower and will also get you charged with fees and interests as well.
If paying off your balance completely is difficult, you should do your best to at least keep it low. While paying off the minimum monthly amount really is not the best way to go at it, if you are having cash flow problems, at least try to pay at least the minimum amount. Aim for maintaining at least 10% of your credit limit. A word about credit limits: credit companies are now busy cutting down available credits so keep an eye on yours so that you'll know if it should change and put you at risk.
As much as possible, be very vigilant when using your credit cards. Always make sure that you are able to zero your balances at the end of the month. Don't cancel your credit cards, though as this will lower your available credit which will negatively impact your credit score. As long as you are smart about your credit card purchases and you manage your balances well, it should be relatively easy for you to maintain a respectable credit score.