Credit score is defined as a measure of risk calculated from a report using a standardised formula and late payments, absence of references and unfavourable credit card use are some factors which can damage a score.
It is important to know how to manage your financial properly.
Whether you are facing problems paying up your bills or you are thinking how to improve your financial stand, having a good credit score will assist you to financial freedom.
Let's look at four ways to improve your credit scores.
1.
Pay off our card Usage of card is a revolving process.
As you swipe and swipe, you will see the increase in the amount of interest rate you are billed each month.
A healthy score can be achieved when there is a big gap between the amount of credit you are using and your available limits.
Hence, you should always avoid treating a card as an alternative means of surviving when you are facing financial constraints as this will worsen your financial position.
2.
Use your cards only when necessary The more you use your cards, the worse your scores are.
It is noted that the scores are calculated based on the balances reported on your last statements.
As a result, paying off your balances each month will not assist in improving your scores.
Hence, you should control your cards usage every month and pay your balance down before the statement period closes to boost your scores.
3.
Ensure that your limit is updated You should ensure that your limits stated in the statements are updated as a wrong limit can affect your score.
Avoid giving an impression that you are maximizing your cards.
4.
Maintain and use your old cards It is noted that the older your credit history, the better it is.
Hence, maintain and use your old cards every few months by charging a small amount and settle it fully when the statement arrives.