Smart Money Habits, Bad Credit Results
In a perfect world, great financial habits would mean that you automatically had excellent credit. Unfortunately, that’s not always the case. There are some excellent personal financial habits that can destroy your credit score.
It seems like it ought to make sense. When you don’t have any debt because you pay cash for things, it’ll be good for your credit score, right? Unfortunately, in order to have a high credit score, you have to actually take out credit. Creating a small balance and paying for it on time is much better for your credit score than never having any debt at all. The trick? Be responsible with it. If you take out a loan, make sure you can make the payments in a timely manner. Don’t miss payments.
Passing on the High Credit Limit
Have you looked at a higher credit limit offered by a bank or credit card and turned it down because you didn’t “need” it or because you didn’t want to be tempted? Unfortunately, this didn’t do your credit score any favours. Part of your credit score is based on your debt to credit limit ratio. Having the credit limit, but opting not to use it, makes you a better prospect for future loans.
Getting Rid of Your Cards
You’ve recently decided that you don’t want to carry debt anymore, and you want to get rid of your credit cards. Think hard, however, before you decide to close those accounts altogether! Part of your credit score depends on the length of your credit history. The longer you’ve had the same card, the better it looks for you. Close it, and your credit may take a hit. Consider keeping those cards, but opting to use them only for emergencies, instead.
Your credit score is your ticket to future loans. With a great credit score, you can get a personal loan online from almost anyone. Have a low score, and you may struggle to get the credit you need when you need it. Many people with great financial histories have poor credit scores simply because they’ve never needed to use credit for anything! Don’t let yourself be trapped by poor credit decisions. Instead, keep an eye on your credit and do your best to build it.
If you’ve found yourself in a position where you need a quick loan to help out, contact us! We’ll provide a short-term loan that will help you get caught up.