Introduction

Credit is a powerful tool. It can help you buy a house, secure jobs, and even get approved for loans.

No matter what stage of life you’re in, it’s essential to understand how credit works and how to protect your good credit score.

What Is Credit?

Credit is the ability to pay for something in the future. It’s a loan from a bank or other financial institution, allowing you to buy things right now instead of saving up all your money and then buying them.

Your good credit score also means that you can afford things like cars and houses by proving to lenders that they won’t lose their investments if they lend money to someone with such a high score.

How do lenders know their money won’t be wasted on someone who can’t pay them back? In short: reporting agencies like TransUnion and Equifax collect information about consumers’ financial histories by monitoring what bills people have paid on time (or not).

How much debt they hold relative to income, etc., then categorize these into broad groups such as “excellent” or “bad.”

The better your rating falls within those categories, the more likely lenders will trust you with their funds.

What’s a credit score?

It is a number in the middle of 300 and 850 that is based on your credit score history. Lenders use it to check whether or not you are likely to repay a loan. Landlords also use it to determine whether or not you are likely to pay rent.

As the name suggests, your credit score can affect your ability to get loans such as mortgages and auto loans, as well as cell phone plans and apartment leases.

Banks use them because they help them decide whether or not they should give out loans; high scores mean better borrowers.

Pay your bills on time

If you want to help ensure your credit score is high, make sure that the payments for any loans or credit cards are made on time. This means paying them before the due date or, even better, paying early if possible.

If your credit card has a balance, try to pay as much off as possible each month so that you don’t have a large amount of debt hanging over your head.

That way, if something happens and you need extra cash in an emergency (like losing your job), then at least some of the money will be available without having to go into debt because of missed payments in the past.

Keep your balances low

The most important thing to do is keep your balances low. This is called the credit utilization ratio, the amount of credit you use divided by your total available credit.

This makes sense: if you have a $3,000 limit and use only $1,000 of it, your utilization rate is 33%.

However, if you max out all three cards with a balance of $3,000 each (or $9,000 total), that same 30% rate means a lot more damage to your score because now it seems like less than 10% of your cards are being used responsibly.

Credit card issuers offer very low introductory rates, often 0% for 12-18 months, but this doesn’t mean those rates will last forever.

If you’re carrying balances on multiple cards with high-interest rates and no longer have access to promotional offers like this one due to recent changes in legislation such as the CARD Act (which requires issuers to disclose terms before issuing new accounts), then pay off those balances ASAP.

Don’t apply for new credit too frequently

This is an easy mistake, especially if you’re trying to build your credit. If you apply for multiple cards at once, it can look like you’re desperate for credit, which could hurt your score.

Instead, spread out your applications over weeks or months, so it doesn’t look like you’re applying for every card out there.

Don’t apply for a lot of credit cards at once.

Don’t apply for multiple credit cards from the same bank.

Try to get a credit card that has a low-interest rate

Be careful with co-signers

A co-signer is someone who signs a loan or credit card application with you. If you default on the payments, they are responsible for the debt.

If you don’t want to pay your bills and can’t find anyone willing to lend to you, consider getting a co-signer with good credit.

You can get approved for higher limits on credit cards and loans secured by other assets (like property).

Don’t close old accounts

It’s a common misconception that closing inactive credit accounts will help your score. It does the opposite.

Your credit report reflects your history of borrowing and repaying, and getting a new loan or credit card with bad marks on your report is not always easy.

Closing old accounts can also make it look like you’re trying to hide something, which could hurt you more than help you.

Make the right moves when you marry

If you’re married, you can keep your credit history. Even if the other person in your marriage is not responsible for any of the bills or debts on your shared accounts and has no interest in taking over that responsibility, their name will be on those accounts.

When they sign up for a new mortgage or car loan, it will only be reflected as a new debt in their name.

Your credit score will stay intact despite the breakup because both parties’ names were included on these accounts when they were opened and used responsibly afterward.

If you are divorced, keep using all credit accounts responsibly so that they continue to reflect well on both parties’ scores (not just yours).

If possible, get a copy of your ex’s latest FICO report before getting remarried so that neither party has any unpleasant surprises when starting with a new spouse or if something happens down the road involving divorce again.

Is 750 a good credit score

750 is an excellent credit score, it’s indeed above average. If you fall in this range, then you can easily get a loan.

Do you need a good credit score for an Amex Platinum?

Yes, You do need an excellent credit score and high income to qualify for the American Express Platinum Card. The credit score must be around 700 plus if you wanna qualify for the Amex Platinum.

Conclusion

In conclusion, many aspects of your credit score can affect whether or not you’re approved for a loan. You must clear your bills on time and keep your balances low to improve your score.

You also need to avoid applying for new credit too frequently, as this could result in being denied future loans or credit cards.

Finally, make sure not to close old accounts when doing so could negatively affect your credit history.