How to get an 800+ Credit Score!
Here are the 3 major things you need to be doing to increase your credit score with your credit card;
Build a Good and Consistent Credit History
This means using your credit card regularly and for long periods. You need to use your credit card every month to show the credit card companies you know how to manage debt. One way I’ve been able to do this is by paying for all my expenses using my credit card. I hardly use my debit card to pay for anything. On the other hand, the longer you have had a credit card, the more history the credit company has for you, which contributes to a good score. One hack to ensure you have a long credit history is not closing any existing credit card. If you want to switch to another credit card, stop using that card and make a few small payments in a year.
Maintain a Good Credit Utilization Rate
Credit Utilization is the amount of credit you use monthly compared to your credit balance. For example, if you have a credit limit of $3,000, credit companies do not expect your monthly balance to be the entire $3,000. Instead, they expect you to use between 1% - 30% of your credit balance, in this case $900. The hack here is to know your statement date and balance due date. The statement date is the day your credit balance is sent to the credit bureau, while the balance due date is approximately 21 days after, which is the grace period to pay off your balance. You need to pay off some of your balance before the statement date to ensure you are within the expected utilization rate (less than 30%) and pay off everything before the balance due date. Doing this regularly will boost your score!
Have a Good Payment History
Never miss a payment! The best thing is to pay off your balance every month before the due date, and the next best thing is to pay at least the minimum payment. I do not recommend paying only the minimum amount but I understand that some months are tighter than others. However, this does not come without its consequences, which are interest payments, and most credit card providers don’t mention this. Also, remember that credit cards have one of the highest interest rates of 21% on average, so try to avoid this. Having a good payment history shows you are a responsible lender and contributes to a higher score.
An additional tip is to avoid frequent hard credit inquiries on your credit history because it negatively affects your score. This could be through applying frequently for different types of credit so ensure your hard checks are planned properly.
Ps: If you are struggling with Credit Card Debt right now, please discard/cut up/dispose of your credit card until you’re able to get rid of it and read THIS!
