Do you know how your credit score is calculated? Do you know how to prevent negative marks from harming your score? When you are divulging in the area of credit score, it is normal to feel flustered. But with proper guidance and information, you can also become the master of your credit score. Here’s our guide for boosting your credit score with the right actions.
You may have found the Credit Card that suits you the best, but even one payment later than 30 days can significantly impact your credit score. Not only do late payments affect your credit score, but if you fall behind on making timely payments, your credit score will take a hit. Lesser known fact, late payments on utilities, rent, phone, or loans can also have a negative impact.
Applying for more credit
Yes, you read that right. Every time you ask for credit, and the credit provider makes a hard inquiry, it takes a hit on your credit score, even when you don’t get approved.
Canceling zero-balance credit cards
While you might have paid off your Credit Card balance in full, don’t cancel it. Canceling or closing your card can hurt your credit score in two ways. It reduces your total credit amount, thereby raising your credit utilization ratio. Additionally, it shortens your credit history.
Transferring everything to a single Credit Card
While this might sound very convenient, transferring all your balance into one card may not benefit your credit score. A high credit limit increases your credit utilization ratio, thereby harming your credit score.
Co-signing credit application
Any time you are co-signing with your friends or family because you have a good credit score, if they have a bad credit score or credit history, you take responsibility for their debt. If they can’t pay, you are the one who has to foot the bill. If you don’t, your credit score will take a hit since you are a co-signer.
Not having a diverse credit profile
Your credit score is made up of different factors. Having a mix, like revolving credit and installment, can help you better your credit score in the future.
Having high credit balances
If your balance slowly reaches your credit limit, it can harm your good credit score. Keeping your credit utilization ratio around 30% of your available credit is advisable. The lower, the better.
Filing for bankruptcy
It might sound like a solution to all your financial problems, but it should be the last resort. Keeping aside the complicated and painful proceedings, bankruptcy can negatively affect your credit score and remain on your file for around seven to ten years.
The bottom line
At the end of the day, building your credit score is an important job. But with Zolve, you can combat a lot of aforementioned points and master the art of keeping your credit score high at all times.
With Zolve, you are less likely to make late payments as we send regular reminders to our customers. With Zolve, you don’t have to worry about raising a request to increase your credit limit since we do that automatically, based on your payment history.
Zolve also provides a zero-balance account and charges zero annual credit and debit card fees.