November 24,2008
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Boost Your Credit Rating(201), Pt.2 –
– Payment and charging habits.So here are some tips and guidelines to be on the upside of the all-important credit card ratings that are assigned to consumers by the rating bureaus. Study them and start acting on them soon, we are advised that new and radical changes have already taken place and will be levied to millions of credit card holders with their very next monthly statements (November). Just remember, if you are shocked with the unacceptable new credit card terms you're given, you still have some options. You can ‘opt-out' from accepting these changes and still limit your losses. Read more on the methods to protect yourself at the end of this series. Meanwhile, here are some important considerations in order to avoid these ugly situations in the first place:
1) Payment history: One of the first measures the credit card rating bureaus will evaluate when assigning risk of a consumer is how stable they are with their payments. Always pay on time (right away is best. If your interest rate is currently favorable, don't pay the entire amount off but still, pay a little over the amount due. Usually $1.00 over is enough to trigger that ‘kudo flag' that says you're a better customer and a safer risk for the lender. Your credit card ratings will go up faster.
2) Credit card history length: The longer a consumer can make regular charges and always pay on time, the higher rating that person will be assigned. Someone who is just getting started in credit cards is advised to start right away. Time goes quickly and, even a person with bad credit can still ‘buy in' (pay a little up front for not-so-favorable terms). It's a small price to pay if that person makes modest charges and pays their balance in full every month. The cost is minimized with no finance charges that way. Everyday purchases should be charged on the card and the money set aside at that time. When the monthly statement arrives, pay it off in full right away. You'll soon start getting mail offers from other lenders for less-good terms – hold off on them. Within three months, you should start seeing better terms. If you're anxious, search out ways to track your credit score (More on that later).