Your credit score can affect your whole life! Either in a positive or a negative way but either way it will at some point affect your life and the choices you make. I have a tip for you today that will help you raise your credit score in as little as a month! Knowledge is power in the credit world, you need to know what makes up your score and how each component can raise or drop your score.
Disclaimer: I am not a Doctor, Lawyer or Financial Advisor. All posts are my opinions and things that have worked well in my life. Please consult a professional for advice.
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Today we will be looking at credit usage. Having a credit card is a good thing in the credit world but if you misuse it then it can really hurt your credit score. Lenders like to see that you are responsible enough to use your credit cards wisely. They don’t want you to max out your cards and they don’t want you to not use them at all either. So then how much should you use them? 50% of your limit? No that is actually too high and will not help your score and could actually hurt it.
How to use your credit card properly
- Use 30% of your max limit of your credit card.
- Don’t go above 30% and don’t go below 20% try to stay in the range of 25-30% that’s the credit usage sweet spot.
- You can still get your points to use on rewards.
- Make sure you always pay your full monthly balance to avoid costly interest charges.
- See the results in 1-2 months(or as soon as the credit bureaus pull your info)
Maybe you use your card for gas or groceries or whatever you want to build up your rewards just keep it to 30% of your limit. Not using your credit cards will hurt your credit score too, so be sure to use it. It is such a simple tip that will dramatically affect your score it is just one of those things most people don’t know. Again, knowledge is power in the credit world. If you can use your credit wisely and make timely payments you will rule the credit world!
Lenders love to see a consumer that can use their credit cards responsibly and pay the balance each month. It shows them that if they were to lend to you that they can expect the same type of behavior.
I love to use Credit Sesame and Credit Karma for my free updated scores. They show me in a clear way what is hurting my score and give me small goals to help motivate me to increase my score. They also offer great recommendations for other loans and cards that are relevant to your personal situation.
I know this is just one little tip but it really does help! Give it a try and come back and tell me your results!
(If your credit cards are maxed out this method may not be an option for you at the moment. Try the snowball debt method to dig yourself out quickly or consider a consolidation loan with a low-interest rate.)