While most of the people do not like the idea of using credit cards with a fear of overspending or incurring debt, some shy away thinking credit cards adversely affect ones credit score and history. This could not be more far from the truth! Credit cards are a double-edged sword. While using them wisely can actually reduce your overall expense; unintelligent usage can lead to more outflow and decrease in credit score.
Apart from convenience, credit cards can help you track your spending as you can match your monthly statements with your expenses, offer ease at the time of travelling, rewards and bonuses and if used wisely can also help improve your credit score. Hence for all those of you, who have stayed away from using credit cards believing that having a credit card can affect your credit score and credit history, it is time to rethink. Credit cards give more insight about how you manage and service your debt, and if used wisely it can help you improve your credit score over a period of time. Here are things to keep in mind if you wish to improve your credit score with your credit card-
Here are things to keep in mind if you wish to improve your credit score with your comenity victoria’s secret card–
Make Timely Repayments:
How you service your debts is one of the most crucial elements in calculating your credit score. So if you are using your credit card regularly and also at the same time paying your monthly dues on time, this is an indication that you are servicing your dues on time and this helps build your credit history and thus help gain trust of lenders. Thus, ensure that you make your payment every month on time and have no late fee charges as this will boost your credit score in the long run. Many a time people confuse paying in advance will improve their credit score, this is not true. You have to pay on time and in full to ensure that it does not impact your score negatively.
Maintain Low Credit Utilization Ratio:
Credit utilization ratio is another important factor which can help you boost or bring down your credit score. Simply put it is the sum of all your credit dues divided by the sum of the credit limits of all your cards. The lower this ratio, the better it is. A lower ratio indicates that you are using lesser credit as compared to your credit limits. A higher ratio signal overuse of credit. You can use this ratio to your advantage by keeping it low consistently and improve your credit score.
Buy a New Credit Card or Increase your Current Credit Card Limit:
Going forward, as more and more transactions are done online and you would need to make through cards, you can opt for increasing your credit limit on your existing card buy a new credit card online as this would increase your overall credit limit, thus helping you maintain a lower credit utilization ratio. The advantage of buying a new card is that each card offers unique rewards and bonuses, some cards have tie-ups with lifestyle brands or petrol pumps and depending upon your individual needs you can opt for another credit card.
To conclude, if you do not own a credit card, now is the time to go online and apply for one as the benefits are aplenty and also if you use properly it helps you improve your score as the score is a mix of how good you are at servicing your revolving debt (credit card dues) and monthly instalments.