Building a good credit score isn’t easy. In fact, it can take years. Thankfully, there is a simple way to build credit and that’s by utilizing credit cards responsibly. In fact, there are several ways to help take advantage of credit when it comes to boosting your credit score.
Another way to boost your score is by checking for inaccuracies on your credit report and working with certified credit repair services in El Paso, Texas to set the record straight. Credit repair agencies can equip you with ways to improve your credit.
What Can a Credit Card Do for Me?
Reward points aren’t the only perk that comes with signing up for a credit card. But did you know that having a few credit cards open at the same time can be a good thing? You don’t even have to use them.
By having an open account such as a credit card actively reporting to the credit bureau that you have never missed a payment, you’re providing evidence that you’re responsible. This in turn raises your credit score. The older the account the greater the effect on your score.
Does canceling a credit card hurt your credit? It can, only if you close it when it has a high, unpaid balance or is maxed out. When you open a line of credit, creditors like to see that you are regularly paying your balance in full. By keeping that line open and paying it off each month, you are building a strong credit history.
That being said, financial institutions may close an account without warning if you aren’t using it or paying them a lucrative annual fee, so it’s best to check your terms and conditions. If you are unsure of how to utilize your credit card, start by charging a small monthly expense, like a Netflix subscription, on it to maintain the account.
The Pitfalls of Credit Cards
Sadly, it’s easy to find oneself on the wrong side of a credit card if you aren’t careful. Maxing out your credit cards regularly will harm your credit score. For this reason, it’s best to spread debt across accounts. Ideally, it will be utilizing the lower-interest cards.
Taking advantage of low-interest balance transfers can be effective if you have a plan to pay off the debt in a short amount of time. Though you should be careful to not take on additional debts anytime you are considering applying for a major loan, such as a home or auto loan.
Another way to misuse your credit card is to cancel a longstanding account, especially if it’s one of only a handful of open accounts that you may have. Doing so could lower what is known as your credit utilization. By showing that you have available and unused credit lines at your disposal you’ll show the credit rating agencies that you’re a responsible person when it comes to managing your money.
Inaccurate Accounts and Payments You Never Missed
For a variety of reasons, incorrect information appears on people’s credit reports on a daily basis. All it takes is a similar name or an incorrectly typed social security number for an account that doesn’t belong to someone showing up on your credit report.
Similarly, banks may miskey your payment information in their systems and show that you missed payments that you’ve actually made. As you can imagine, rectifying this is a tedious task.
In these situations, you can file a dispute with the bank or creditor. Using evidence, such as receipts from payments or bank statements, you can prove you were making timely payments and have the false items removed from your report.
Finding these documents takes expertise. Fortunately, licensed credit repair specialists such as The Phenix Group can help you cut through the red tape by working with the banks and the credit reporting agencies on your behalf. They’ll ensure any inaccuracies are removed and provide you with best practices and advice to help you get your credit profile back on track toward having a good credit score in the state of Texas.