Credit card credit lines can greatly affect your credit score in either a positive or negative way. In fact, the choices you make concerning how you use your card will determine if the credit card company makes good or bad comments to the credit reporting bureau. Using credit cards wisely can positively impact your credit score quickly. Conversely, poorly managing your credit card credit lines can be detrimental to your credit score making it harder to obtain financing for other items like homes or cars. Take care of your credit card credit lines and you can put them to work in your favor.
Building and Strengthening Your Credit
If your credit is poor or non-existent, credit card credit lines allow you to strengthen and build your credit score. Often credit cards are the first and only type of credit people are eligible for when they turn 18 years old, or when they first move to the United States. Such individuals can build a good credit score quickly and easily, which will allow them to get other types of credit, by showing responsible use of a credit card first.
Following catastrophic credit score events such as a bankruptcy, taking out a credit card is the first step in rebuilding your credit score. High risk credit cards with low credit limits are available to people who are in this situation. They may also opt for secure credit cards where they deposit money with the credit card issuer equal to the credit limit. They then use the credit card as normal, paying on it regularly until their score is established enough to get a regular unsecured card. Careful, responsible use of a credit card is a great way to rebuild that destroyed credit score.
In fact, any time you notice that your credit score is not as good as you would like it to be, improving the use of your credit cards is often the quickest way to improve it. You can pay down your cards to improve your debt ratio. You can ensure payments are always on time and you never go over the card limit. You can also maintain a balance so the credit card issuer sees you managing credit and not simply paying it off in total every month.
The Negatives Impact of Credit Card Lines
There are times when credit card credit lines can have a negative impact on your credit score. However, if you understand the situations which are hurtful to your credit score, it is easy to avoid them. Too many credit cards taken out at once can negatively impact your credit score. Whenever credit inquiries are made of your credit report, it can affect your credit score. Credit card issuers always check your credit prior to issuing a card. Making a rash of applications at the same time will lead to a high number of inquiries which can drive down your score.
If you use your cards too much and the balances are too high, this reflects poorly on your credit score. You should always have a significant portion of your available credit unused. If you use a high percentage of it, your credit score will drop. However, this is one of the easiest ways to improve your credit scores. By simply paying down the balance on your cards, without closing any, you can improve your credit score.
Closing credit cards can have a negative impact on your credit score, as can reducing your credit lines. The major reason this impacts your score is because it often increases your debt ratio when it happens. If the company closes your card or reduces your credit line it appears worse than if you do it yourself. Also, you should be careful of the card you choose to close. If you really want to close credit cards you have in your name, opt for ones that are not your oldest credit cards. The length of time you have had a card impacts your credit score also. Getting rid of your oldest ones is counterproductive.
Find a Credit Card That Meets Your Needs
Using a credit card wisely by making payments on time, not exceeding the credit limit and keeping balances low will help your keep or build a healthy credit score. Having credit card credit lines that are in good shape is very useful to your credit score. When you are ready to get a credit card to help your score, our credit card chaser can help you find the ideal one that fits your needs. While you help your credit, you can also be earning rewards towards things you really want. Let the credit card chaser above find the best credit card options for you, so you can compare them in order to make sure you choose the best credit cards possible.
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