Practical Tips For a Good Credit Rating Score

November 25th, 2020 by admin Leave a reply »

Here are a few practical tips you can use to gain a good credit rating score and boost your credit worthiness as you go about your day to day living, with little or no extra effort required.

Shelve your unused cards but keep the credit facility open

If you have more than one credit card and you are considering closing down the facility so that you are not tempted to spend any more with them, here is a suggestion that can actually help to keep your credit score looking healthy.

Instead of closing the credit facility, shelve the card and keep the line of credit open. The reason for this is that you have already been granted a credit amount which will show up on your credit report as part of your accumulative credit limit, and if it has a zero balance owing then your overall debt ratio is lower and this works in your favor.

For example, if you have 2 cards with a $3000 limit on each effectively you have a $6000 line of credit. If you regularly use one card up to $1500 then pay it off each month, you are only using 25% of your available credit which is great in terms of your credit rating.

But, if you closed one card, then you only have a $3000 line of credit and you will be using 50% of your available credit each month, still OK but not as favorable to your credit rating.

You may need to very occasionally use this card just to keep the credit facility active.

Use your credit card and make it work for you

First of all this is not promoting erratic spending, but rather this promotes using your card on a regular basis to give you a good credit rating score.

If you use your credit card to purchase your groceries, gas, utilities etc, that’s fine – just make sure you always keep these 2 things in mind:

Never exceed 50% of your credit limit (and preferably even less than 50%)
All purchases must be paid in full by the due date

Keeping your card less than 50% of its limit shows that you are not living on debt and gives credit suppliers confidence when they are reviewing your credit history.

Paying off your card in full every month shows you as consistent, reliable and builds credit-worthiness, plus credit suppliers can see you are living within your means.

Consistency is the key here and it adds up over a period of time – who would have thought you could improve your credit score a little just by doing your groceries each week!

Make sure your credit report contains no errors

It might seem like a trivial thing to do, but it can be quite surprising how many people find actually find incorrect file comments, or clerical errors that have been attributed to their credit report and these errors can have an effect on your credit score.

That’s not to say it happens all the time because it doesn’t, but for the sake of a few minutes of your time it really can be worth doing.

If you do find errors, you will need to gather evidence to refute the claim, so a well kept record of all your statements and receipts is invaluable for this. If you have not kept your statements or receipts, then you will have to pay a visit to the place of purchase to seek a copy of receipt. Of course it’s a little more time consuming, but still well worth the effort.

Finally, if you do have to dispute an incorrect comment or claim it will be far more productive if you approach the credit bureau in cool, non-threatening manner, simply stating the facts backed up with written evidence. No point getting all steamed up and going at them with all guns blazing – this will just hinder your progress and make things difficult if you need their assistance in future.

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