When it comes to credit cards credit score, most people don’t have the slightest clue what is on their credit report or what their credit score is.
This is dangerous because if you don’t know what constitutes your credit score then you probably don’t understand credit that entire well.
If you have a credit score below 650, then there is definitely room to improve your score.
If your score is below 550, then you are in need of immediate help. I have provided some tips for you to better understand the basics of credit.
Credit Cards Credit Score – Basics
First, did you know that regardless of whether you pay your credit cards on time every month, if you have outstanding balances of more than 25% of your credit limit, your credit score is negatively impacted?
It is a sign to lenders that you are financial responsible if you carry a low balance and pay it off each month. When you use above 50% of your credit limit and only pay minimum payments it indicates to lenders that you are not very financially responsible.
Credit Cards Credit Score – “Hard Pulls”
Second, when you have your credit pulled or “looked at” too many times, it can actually hurt your credit score. This “hard pull” penalty is based on a 90-day time period. When you are shopping for a large ticket item or seeking some other type of financing, the more your credit is pulled the more your credit score will drop.
To deal with this effectively, pull your credit report once yourself and take copies to the relevant financial institutions. Once you’re sure that you will be approved for the credit you are seeking, then give permission for the lender to pull your report.
Credit Cards Credit Score – Improving Your Score
Credit cards credit score on how to improve your credit score. You need to get rid of derogatory items that are listed on your credit report. It helps your credit more if you pay off 4 negative items that are $50 in arrears than on one item that is $200.
The reason for this is that the number of derogatory items listed on your report are generally more significant than the dollar value of the negative item. This information is also helpful to you since you can start with the smallest and most manageable past due accounts and tick them off one by one as they are paid.
- Please check out the many articles on this site. Credit cards credit score has many well researched articles to help you with all aspects of credit cards and credit scores.