Credit Card Score

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Whenever we hear about credit card, apart from many other things, one more thing that comes to our mind is credit score. Credit card score is a very important thing which should be maintain. In this article we will know why this credit score is so important, how it helps us and how it should be maintained. Before knowing how to maintain credit score we should know what credit score is. A credit score is basically a prefiction of your credit behaviour. Based on the information recieved from your credit, it estimates your probability of repaying the loan on time. A good credit score can help you in many ways.

Now you may think what a good credit score is. For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good and the score of 800 or above on the same range is considered to be excellent. Basically the higher your credit card score, the more benifit you will get from it.

Benifits of good credit score are briefly discussed below:-

  1. Lower interest rates on credit cards and loans:-
    When you borrow money, you have to pay interest, amd the interest you get is often directly tied to your credit score. If you have a good credit score, there is a good chance that you will have to pay less interest on credit card balances or loans. The less you pay kn interest, the sooner you will pay off the debt and you will able to save a lot of money and spend it on the other expenses.
  2. High chances for credit card and loan approval:-
    If your credit score remains poor for a long time, your credit may be closed. In such a situation, if you apply for a credit card again. Your credit card application may be rejected due to your bad previous credit history. A good credit a score does not guarantee you getting a loan or credit card, but it does improve your chances .
  3. Better chances of approval for higher borrowing limits:-
    One of the best benifit of good credit score is you get higher borrowing limit. When you apply for a long loan, the bank first assures wheather it is right to give you the amount you have applied for. Because the amount of loan the bank will give you is depends on your income and credit score. If your credit score is good then banks are ready to give you loan of higher amount without any hesitation as you have demonstrated that you pay what you borrow on time. It is not that you will not get a loan because you have low credit score, but the amount will be more limited.
  4. Good car insurance rate:-
    Nased on your credit report and insurance history, insurance companies develop your insurance risk score. If you have good credit score, in compare to other applicant with low credit score, you will pay less in insurance. Basically you will free from the penalty on insurance given by insurance companies.
  5. Utility hookups without security deposits:-
    If you are one of those who pay utility bills like electricity bills, gas bills at the end of the month then credit score can be an important things for you. Often these companies check your credit score to know that you will be good for the payment. If your credit score is low they may charge security deposit at the beginning of the month. Which may turn to be huge inconvenience for you.
    Apart from the benits described above, there are many other benifits of maintaining a good credit score.

After knowing what is a good credit score and what are its benifits, now the question comes that how to create or maintain this good credit score. If explained in simple words, to get a good credit scores, pay all the bills on time. Again keep your credit utilization rate also low. Try to keep atleast below 30%, but the lower, the better. Do not take multiples loans at one time from different organisations if you want to improve your credit score. Also you can use some tricks which can improve your credit score. For example, you can buy any electronic gadget like TV, refrigerator, mobile phone etc. with loan and use your credit card to repay that loan. You will improve your credit score by repaying your loan on time. Another important thing which you should keep in your mind that never use your credit card for loan sattlement. This may put negative impact on your credit score

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4 thoughts on “Credit Card Score

  1. sekret-natury.pl

    Insightful piece

  2. Marion Pafel

    Excellent write-up

  3. Czytaj dalej

    Insightful piece

  4. Rozpocznij teraz

    great article

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