There are negative perceptions around credit cards, however, what people do not know is that a credit card can boost your financial records, which can make it easier for you to qualify for any type of loan.
A credit score helps scoring models measure what type of risk you pose to lenders, therefore, whatever you do with your credit card affect your credit score? Even not having a credit card can affect your credit score.
The credit card issuer, often report your accounts activities to at least three major credit bureaus, this includes a credit report, credit limit, credit card balance, payment history, account status, and dates the accounts were opened. All these influences the credit score.
To ensure that you have a high credit score you have to follow simple rules:
- Make sure credit accounts payments are made in the due date.
- Make sure you pay the full instalments every month.
- If struggling to repay your debt each month, make realistic repayment that you can manage.
- Do not keep unnecessary credit cards that you no longer use, pay them off and close them.
- Limit the amount of credit you’re using, do not use the whole amount if you do not have to.
- Limit the number of credit applications you make, It will reflect as if struggling to manage the amount of debt you currently have.
- Make sure you avoid too much-unsecured debt.