Credit Traps To Stay Away From

With a good credit score, a lot of doors are open in the form of credit facilities that financial institutions are willing to offer. Such is the influence that this sole number can command making it the most paid to attention in a person’s life. It is easy to see why some people dedicate their lives to coming up with strategies of how to get a good credit score. It is possible to concentrate on building personal credit and lose sight of the target by being unaware of what credit score is good. A good credit score is literary a gold-mine, and the fact of the matter is that every lender has got their own ideas to average scores. If most of the people who took mortgages over the last 5 years realized how much savings they would be able to make on the loan interest by paying attention to what credit score is good, there would be increased efforts at how to get a good credit score.

A credit score can be any number from 300 to 850, where 300 is considered to be very bad score and 850 very good and equally difficult to achieve. If you are one of the millions of consumers who blankly look at their credit report, you are not alone. Apart from knowing where you lie within this range, there is nothing more to a credit report, at least to a layman. Educating people on how to get a good credit score and what credit score is good has been a practical approach for lenders and financial experts to demystify credit. An important component of mass education is what not to do when building personal credit;

Increase your credit limit – if you have an impressive credit history, it is not hard to get your credit card limit increased if you request for it. The problem with most people is that they have a spending plan but have not given much thought to how they are going to service their debt. One of the secrets of how to get good credit score is to spend less than the limit and pay more than the minimum amount. If you cannot manage this, rest assured that increasing your limit will hurt your credit score.

Apply for many new credit accounts over a short period – you may be a few points away from the perfect credit score and it is easy to get tempted to rush the process. Having knowledge of what credit score is good for some people could mean opening up new credit card accounts to achieve it. In most cases, people will consider new accounts during offer periods because credit card companies promise either rewards or waived interest charges. A store credit card, for instance, is a good thing to have provided you will not be tempted to go shopping all the time.

Close a credit card account – the longer you have held a credit account for, the better it is for your credit. While a credit history may be unimpressive because of the number of negative transactions, closing the account will erase both the good and the bad. Having a long history of credit even if marred by periods of decline of credit score potentially increases the overall credit rating. If your reason for wanting to close an old credit account is an attempt at how to get a good credit score, then it may not help much. A negative report especially stays active for up to seven years so it would be wiser to try to correct it instead of aging it.

Building your credit score is just one of the life’s many goals and should therefore not be the primary focus of your life. It is good to stay on top of things especially when you are planning to get credit in the future. Instead of allowing your mind to be constantly thinking about the negative activity that describes your past credit history, be assured in the fact that it is possible to change the direction of your credit score forever. This can be done by deliberately choosing to improve and follow your repayment plan even though you did not do so in the past.