Have you noticed that your credit card interest rate has increased this month? Could it be because of your low credit score? What can you do to start fixing your credit? Here are guaranteed ways to improve credit score:
Read your credit card mails regularly. Do you check your monthly credit card statements? Or are you in the habit of setting them aside without even reading what’s inside or opening the envelope?
If yes, your credit card issuer may have already increased your rates without your knowledge. If you read your terms & conditions, it clearly states that credit card companies have the RIGHT to changes its current rates and fees as long as the cardholder is notified 15 days in advance.
Request for a lower rate. If you think your present interest rate is unreasonably high, don’t be afraid to discuss your concerns with your credit card company. Speak with the manager and explain your issues.
If you’ve been a long time cardholder, point out this fact and remind your credit card company how you’ve been a good payer. It would also help if you know the interest rates that other credit card companies offer. If you threaten to close your account, most credit card companies would be willing to adjust their rates than to lose reliable clients.
Pay more than the minimum. Submitting only the minimum means you’ll be charged with the additional interest costs. On the contrary, if you pay off your monthly balance in full, you don’t have to pay the interest.
Furthermore, by paying off your monthly balances, you reduce the risk of bad debt and you can maintain a good credit score. So even if your credit card allows a very low minimum payment, why prolong your debts when you can pay them off right away?
Pay off your high-rate credit cards first. Do you own multiple credit cards? The best way to handle them is to avoid incurring charges on all your accounts at the same time. But what if you already have existing charges on all of them?
Pay off your credit card with the highest rate of interest first and work your way down. This way, you avoid debt build-up due to interest fees.
Use your credit card only for charges that you can pay off immediately. Before charging any expense on your card, ask yourself, “Will I be able to pay off my charges in full?”, “Can I really afford this purchase?”, “Do I really need to buy this today or can it wait?” If you have doubts, better postpone your purchase or better yet, use cash and don’t charge it on your card.
Don’t maximize you credit limit. Using your credit limit to the full can dramatically pull down your credit score. Lenders are looking at your credit-to-debt ratio when reviewing applications.
If your credit history shows that you’ve been maximizing your credit, it can raise an alarm to prospective creditors. To maintain a high score, experts recommend not using more than 40% of your allowable credit.
Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit.
