Five Surprising Ways Credit Cards Can Improve Your Credit Score
There are many people that think that having a credit card is not a good thing and they try to avoid them. However, there are ways that having a credit card can be good. One of these is that it can improve your credit score. It does this in a number of ways.
Less Risk
The fact that a company has trusted you enough to give you a credit card should be enough to let others feel that you can be trusted as well. This will certainly help your credit score meaning that you are more likely to get credit elsewhere, should you need it. It is better if you use the card though, just applying for one, getting it and not using it will not help very much. Also you need to try not to spend up to the credit limit and then only pay back the minimum, this will not work in your favor either.
Reliable
If you make the minimum payments each month it will show that you are reliable. You will not have to pay more than the minimum to prove that you are able to make a regular repayment and this will certainly work well in your favour. If you do not spend much money on the card, the minimum payment will be low. Bear in mind how much you will have to pay back when you are spending on the card to make sure that you can make this payment.
Easier To Make Repayments
A credit card is easier to pay back than some other types of loans. For example, a payday loan requires the whole loan to be paid back in one go and this can be unmanageable but a small payment each month is much easier. When you are making the payments, it is improving your credit score. So keep the amount you spend low and then you will be able to make the small repayment amount each month.
Payback Full Balance
If you pay back the full balance each month this can look even better. It will also be much better for you as it will mean that you will avoid paying the interest charges and these tend to be high on credit cards. This will only be possible if you do not spend too much on the card and so bear this in mind when you are doing your shopping ith your card.
Have Several Cards
Some people think that having too many credit cards looks bad. However, it can help you to look good. If you borrow small amounts on each and always pay back at least the minimum balance every month then this will look good. It is better to spend a small amount on each card so that you have a lot of credit available to you that you do not use. This makes you look more sensible with money. Do not have too many cards though, just two or three should be enough to improve your credit rating.
About Macie
Macie is a finance graduate from a leading University in Melbourne Australia. She has just started working for a leading bank in Melbourn. Her passion for about business and personal finance has made her write this resourceful article. Recently while searching for the best debit card / credit for her banking needs she visited www.debitcard.com.au where she had all the information along with comparison about various credit / debit cards she can get.
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Category: Credit Cards
