A person’s credit score can say a lot about his financial standing. This numerical expression is analyzed based on the person’s expenditures using a credit card, His credit history also affects his level of creditworthiness for a loan, mortgage or in applying for another credit card.
For anyone looking to purchase a property on the Philippines real estate market, maintaining a good credit score is vital. Being accepted for a mortgage is reliant on your credit history, so it’s important knowing the top credit score killers to look out for and the best ways to resolve them in order to keep your finances in good shape.
Credit Killers
High Credit Card Balances
If you pay your bills on time, then you must think that your credit history must be fine. Wrong. If your balance is always maxed out, your credit score could be hanging in the balance. You should probably aim to only spend around a quarter of the available credit on your card and if your balance starts to creep up, it might be time to switch to a card with a higher limit.
Making Late Payments
If you miss your payment date, your credit score is going to be adversely affected. Make sure that any loans and credit cards are always kept up to date. It is also wise to take care of your utility bills before they are referred to a debt collection agency.
Making Lots Of Credit Applications
If you suddenly apply for a lot of credit cards at the same time, your credit score is going to take a nose dive. You can, however, apply for multiple loans at once, so that is worth noting if you need credit, but don’t want to affect your rating.
Closing Your Cards
Keep old credit card accounts open even if you no longer use them. Each card that you have, regardless of usage, increases your credit utilization rate and helps to keep your credit score up.
Score Boosters
Pay Your Bills
It’s obvious, but if you keep up your regular repayment schedule, your credit history will keep on an even keel.
Check Credit Reports Regularly
Many people fail to ever check their credit report, but it makes sense to do so regularly. You can request a free copy which you can then peruse for errors that may be holding down your credit rating.
Don’t Max Out Your Balance
Just because your credit limit is high doesn’t mean that your balance should be high, too. Avoid maxing out your cards and if you can, try to stick to 30% of your total limit.
Get More Credit
It sounds counterproductive, but it makes sense. Having good credit breeds a good credit rating. Debt actually improves your credit score as long as you pay it off on time. Take out a card, spend a little and pay it straight off. But don’t take out several at once or alarm bells will start ringing and it could have the opposite effect.
