May 11 2016
Increase your Credit Score using Credit Cards with low rates
What is credit score?
Credit score is the numerical value that designates your worthiness of getting a loan. This credit score is an assessment of various factors that include your credit history, repayment method, punctuality etc. Raising your credit score is a must if you need a bank loan for personal or business needs. Banks offer loans to people who are credible enough to repay the loans on time as well as to people who have previously taken loans. You can use various methods to increase your credit score using credit cards with low rates.
How to raise your credit score with credit cards with low rates:
You need to be punctual when you repay your loans. Banks will never deny you loans if you have repaid your loans on time along with paying the complete amount that you have against your credit card with low rates. Build your reputation as a borrower by repaying your loans before you default. A single mis-timed payment will result in a fine along with your credibility being smeared.
- Monthly Payments v/s Yearly Payments
If you are looking to raise your credit score, you need to make monthly payments rather than making yearly payments since your credit score needs to be revised as many times as possible for raising it. Yearly payments of your balance will raise your credit by a small fraction in comparison to the monthly payments.
- Maintaining minimum balance
If you are looking for a higher credit scores , you need to maintain a minimum balance that has to be paid to the credit card company. The balance that you owe to these banks comprises of 30% of the total credit score evaluation. Thus always make sure to use credit cards with low rates and repay the chunk of the balance to maintain a better credit score.
- Limit your expenses
It is necessary to understand the fact that using credit cards with low rates for purchasing items does not directly get entered into the bank statement. It is only after repayment of the balance that you will find your balance debited of the amount. Excess spending without repayment will leave you with no clue as to how much money you have spent. Thus it is necessary to limit your expenditure.
- Keep Open accounts
Credit cards with low rates are offered for a short period of time. People take advantage of this fact and resort to new banks to provide them with credit cards with low rates. This activity can be tracked by banks and this can affect your credit score in a drastic manner.
Conclusion on credit cards with low rates:
Credit cards with low rates are the best options to improve your credit score, since you can carry out multiple transactions regularly for getting a higher credit score. Keep in mind to use this feature in a controlled fashion since this is a vicious cycle and people get trapped easily.