Credit score or credit score is an assessment of the performance of credit card use. Good performance provides many advantages. One of them is to facilitate the process of borrowing money, both small and large amounts. Both the bad credit score of a person can be measured by how often the credit card is used, the smoothness of the payment, and the amount of credit that was once owned.
Then how well do you have a credit score? If the score is bad, try doing the following simple trick so that the credit score can increase slowly.
1. Maximize the Use of Credit Card
The use of credit cards determines credit scores. The more often credit cards are used for transactions, the better the credit score that will be obtained. Therefore, pay your installments or groceries using a credit card, so that transaction data is recorded on a credit card.
Scale the priority of payments to avoid overusing credit cards. Use a credit card to pay bills or large nominal purchases, such as buying new furniture or new electronic devices. While for bills such as electricity or water, it’s better to pay using cash.
2. Don’t Apply for a New Credit Card
The more credit cards, the more difficult you are to control yourself. Therefore, more and more offers are coming in, so that money is spent more than it should. This is not good for financial health in the future.
The credit card you use might not work with your favorite cafe or restaurant, but that doesn’t mean you have to add a credit card. One credit card is enough to help reduce expenses. So, no need to make a new credit card.
3. Save an Unused Credit Card
If you insist on adding to a credit card, go ahead. With notes, do not throw away unused credit cards let alone want to close their accounts. Old credit cards can be used to improve credit scores, especially if the credit history is good.
Since it is not used, you should keep your old credit card in a safe place. Make sure the credit card is in good condition. If at any time needed, you can take it and use it for various purposes.
4. Remember Your Obligations every Month
Every transaction using a credit card is debt, and the debt must be paid when due. Then pay your debt in an orderly manner. If necessary, one week is faster than the due date, so the credit score slowly improves.
In essence, never run away from responsibility. To avoid bad credit due to worsening financial conditions, it’s better to add payments every month. Payments that should have been $1,000,000 per month could be increased to $1,500,000 per month.
5. Ensure Transactions Do Not Exceed Limit
Credit card limits vary, there are USD 8-10 million per month, USD 15-25 million per month, and so on. Know your credit card limit to avoid transactions that exceed the limit. If there is an over limit, it will be subject to sanctions in the form of an over limit card with a nominal value that cannot be predicted.
The ideal use of a credit card is 30% of the limit amount. If the credit card limit is USD 25 million, the maximum usage is USD 7.5 million per month. If the usage exceeds 30%, you can be sure you will have difficulty when paying monthly bills.
6. Activate the Auto-debit Payment System
In order not to forget to pay credit card bills, activate the auto-debit payment system immediately. This payment system will be linked to your debit card. When the bill is due, the money on the debit card will be deducted automatically according to the amount of the bill to be paid.
Understand financial conditions before using an auto-debit payment system. Also make sure the money on the debit card is always left, so that payment of bills is always smooth. If the debit card is empty, bill payments will be overdue without realizing it.
7. Monitor Bills Routinely
Set aside time to monitor your bills regularly. If there is an error recording the bill, you can immediately report it to the bank to double check and fix the bill. The same thing applies when overpayment, so that the rest of the payment in this month will be automatically reduced by the payment in the next month.
In addition to minimizing losses, monitoring bills is very good to fix financial conditions. If expenditures in this month are greater than the previous month, you can find out the cause of the swelling expenditure. Thus, you can find ways to prevent this from happening again in the following month.
Discipline Improving Credit Scores. There are many challenges that hinder your desire to improve credit scores. But you do not be pessimistic, do the simple tips above with high discipline. That way, improving credit scores is not a difficult thing to accomplish.