How to Build Up Your Credit Score

A good credit score is useful when you make purchases that involve monthly installments. It allows the buyer to have a lower Annual Percentage Rate (APR) charged on such a purchase.

A good credit scores ensures that the APR charged is low and the monthly instalments do not get out of the roof.

Keeping a good credit score is no rocket science. All it takes for you to understand the process and make sure that you do not treat your credit cards as free money. Perseverance of good habits should help you built an excellent score.


  • 1

    Careful Spending

    Only use the credit card for something that you can pay for with cash. It does not mean that you buy everything on your credit card. If you can pay five hundred dollars per month to your credit card, make sure that your purchases are less than that amount.

  • 2

    Spending Pattern

    Make sure that you have a sensible spending pattern. Experts believe that it is best that you spend in between 5% to 85% of your total credit at hand. Less than or more than that shows that you either do not spend at all or spend too much. The credit score is actually affected by this.

  • 3

    Payment Schedule

    You must pay on time. Make a habit of sending the check or making the online payment as soon as it is due. Try not to make minimum payments or a little more than that, and try to settle the bill each month. This makes you less likely to end up in a payment mess and will also work well for your credit score.

  • 4

    Types of Credit

    All kinds of credits have a different impact on the credit score. Nothing beats a home loan or a vehicle loan. It accelerates the process of your credit building and you can expect a high beacon score within months of regular payments. Credit cards and personal loans  help too but not in the same manner.

  • 5

    Length of History

    This is the most crucial part. If your credit history is fresh, a good score will count but not all that much. On the other hand, if you have the same good credit score with a few years of history at least, and without any red tapes such as a collections account, you should get an excellent APR wherever you go.

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