A credit score means a lot to people and everyone work hard to keep it at a good level. The reason why we need a good credit score is to be able to apply for a loan or a credit when we need it. Ruining the credit score may reflect on your inability to get the loan when you need it, as banks do not trust people who have a bad credit score. What can you do to keep a good score?
Manage all debts on time
Many people fail to do this for various reasons and that can be very problematic later. Also, some people prioritize the loans that have high-interest rate and they neglect the ones that have a lower rate. Over the time, the one with the lower rate accumulates and it is an ungrateful situation that can cost you getting a loan. Always have an insight into your debts so you could know when it is the time to pay for it. There is no way to escape paying it, so it is better then to pay all them regularly than to focus on the one and neglect the others.
Do not overuse your credit cards
If you have several credit cards, try to make a balance when using these. The biggest mistake is to use only one while the other cards remain inactive. This accumulates a lot of debt on a single card that you must repay. Of course, this may not be an effective strategy if the high-interest rates are applied. However, in the majority of cases, it is better to spread out your expenses to keep all cards’ balances at normal. This ensures your credit score stays positive so you could apply for a loan or a mortgage.
Do not exceed your limits
Try not to exceed your limits as this can make things a lot difficult and hard to manage. The overall debt on your credit card should not be more than 20% of your annual income. This is the golden rule that you must follow! You can talk to a financial expert so he could make a calculation or implement a tool for your expenses. This may cost you some money, but it will save you a lot of money! Also, try to prioritize your expenses. Do not buy things that are not necessary at the moment, but rather focus on priorities.