Jul 21, 2017

Many people get injured in a financial accident because they are not financial literates. Unfortunately, financial literacy is not taught in schools, so people are left to figure things out for themselves.

For this reason, we have decided to help you out by outlining five easy steps to improve or enhance your credit this month.

1. Understand the Various Kinds of Credit Cards

Using your credit card sensibly is the best way to enhance your credit score. First and foremost, you have to ascertain the kind of card you are qualified to receive.

The type of card you are eligible to receive depends on whether your credit score is excellent, fair, or bad. So, when applying, make sure you apply for the one you are eligible to receive.

Your card issuers or credit account providers may allow you to access your credit score freely. You may also purchase one from credit bureaus such as Equifax, TransUnion, or Experian. Many lenders use FICO score as their scoring model. Make sure the card suits your credit score. If you can’t find such information, ask the issuers.

2. Understand the Penalty Involved in Applying for New Cards

Getting a new credit card and closing the older one will affect your credit score adversely. We strongly recommend leaving a space of at least 6 months before applying for a new card.

Many people do not know that it takes 10 years before their closed account is removed from their credit report. It will remain there without activities, and this affects your credit adversely, that's why we suggest leaving your old cards open unless they have annual fees or you cannot use them anymore.

3. Pay Your Debts Quick

One of the best ways to improve your credit score is to pay off your debts. There is a principle that will help you pay-off your debts quickly, which is, “make more money and spend less.” You can devise other means too, but this principal is the pillar.

4. Understand The Way APR Works

Many people do not understand how the Annual Percentage Rate (APR) works. They don’t know that they are charged interests when they carry their balance to the next month. The secret is that you accumulate interests based on your average daily balance; therefore make sure your balance is fully paid every month on or before the date due payment. If you can do this, then, you don’t have to be anxious regarding your card’s APR.

5. Exercise Patience

The truth of the whole matter is that you have to exercise patience while following these steps meticulously – it will take a while for your credit score to be considerably improved.

Finally, remember to spend less, pay-off your debts, and make sure you don’t carry a balance to the next month. If you following the above five steps, as your account gets older and its history lengthened, your score will improve more than your expectation.

We hope these tips help you. Enjoy your financial literacy month!

Action speaks louder than voice, take action now!

Thanks for Signing up for ConsumerHacks™

You are now a certified Hacker!

Make sure you add our email to your address book: