Get A Good Credit Score
How To Build A Good Credit Score
Want to build up a good score? Before you think about using a credit card to make that purchase, think twice.
Here's some helpful advice for building, and maintaining, a high credit score.
Charge Only What You Can Afford
We have been so conditioned to charging that we don’t give it a second thought. However the principle of building a good credit history and staying out of debt is charging only what you can afford to pay.
How much is that? Only you can answer that because only you know your personal finances. But if you can't pay off the credit card in one or two payments then you really shouldn't be making that purchase.
How much you can afford to charge depends on your discretionary income – what you have left after taxes and other necessary expenses have been paid. What you might call your “spending money.” You would use your spending money to pay off your credit card balance, so you should never charge more than you have available to spend.
Disposable Income — Necessary Expenses =
Discretionary Income (What you can spend on anything you like)
Your will have a good credit score and it will never be better than when you pay your credit cards in full each month. So, if your discretionary income is $1,000, the most you can afford to charge is $1,000.
Also don’t forget what you might spend on clothes, entertainment, etc. Most people forget these. Don't charge up more than you can pay off exactly when the bill comes due.
Also - Never charge more than your credit limit. Keep your credit card balance below 30% of your limit. So, on a card with a $1,000 limit, you shouldn't charge more than $300. This should be your goal if you want to build good credit and maintain a good credit score.
If you have balances on other credit cards, it’s best to pay off those balances before making any new credit card purchases, especially if you’re already having difficulty making payments. This will prevent your credit score from dropping due to high balances, and also establish a good payment history on your reports.
DON'T KNOW YOUR CREDIT SCORE? CLICK HERE TO GET IT
CREDIT CARD TYPES
There are three types of credit cards. Pre-Paid, Secured and Unsecured. Here's the differences and what they can do to help you build a good credit history
HOW CREDIT REPORTS WORK
If you've never seen your credit report it can be a little confusing. Here's a simple explanation of how credit reports work.
MYTHS OF CREDIT REPAIR
Some people will tell you that it's easy to fix mistakes on your credit reports. Others will tell you that you can actually erase legitimate dings on your credit. Both of these people are wrong. YES, you can legally repair your credit but here's why a company like LexingtonLaw fix your credit mistakes faster and easier than you can ever do it yourself.
