make the minimum payment if you cannot pay the full amount you owe .Don’t go over your credit limit. If you have a credit card with a limit of $5,000, try not to go over that limit. Borrowing more than the authorized credit limit of a credit card negatively affects your credit rating.Try to use only 35% of the credit you have. It’s better to have a higher credit limit and use less monthly.a credit card with a limit of $5,000 and an average usage of $1,000 equals a usage rate of 20%a credit card with a limit of $1,000 and an average usage of $500 equals a usage rate of 50%If you are using a lot of your credit, lenders will consider you to be a higher risk. This is the case even if you pay your full balance by the due date.To determine the best way to use your credit, add up the limits of all your credit products.
These products include:
For example, you have a credit card with a limit of $5,000 and a line of credit of $10,000, the credit you have is $15,000.Then calculate your credit utilization rate. Try to use only 35% of the credit you have.
For example, you have a loan of $15,000, try not to borrow more than $5,250 at a time, or 35% of the sum of $15,000.Increase the length of your credit history .The longer you keep a credit account open and in use, the better it will be for your credit rating. Your credit rating may be lower if you have relatively recent credit accounts.If you transfer an old account to a new account, it is considered new credit.
For example, some credit card offers have lower introductory interest rates for balance transfers. The new card to which you transfer the balance is considered a new credit product.
Remember to keep an old account open, even if you no longer need it. Use it occasionally to keep it active. Make sure there is no charge if the account is opened but not used. Check your credit agreement to see if there are any fees.Limit the number of credit applications and inquiries .It is normal and expected to ask for credit from time to time. When lenders and others ask a credit bureau for your credit report, it’s noted as a request. Applications are also called credit checks.If there are too many inquiries on your credit report, lenders may believe that:limit the number of times you ask for credit .?get quotes from different lenders over a two-week period if you’re shopping for a car or a mortgage, so these inquiries are combined and processed as one inquiry for your credit score
only ask for the credit you really need.Requests “with impact” and “without impact”
“Impact” requests are requests noted in your credit report and which have an influence on your credit score. Anyone who checks your credit file can see these requests.Examples of “with impact” requests include:”No impact” requests are requests noted in your credit report that only you can see. These inquiries do not affect your credit rating.Examples of “no impact” requests include:request your own credit report .?a company requesting your credit report to update their records regarding an account you have with them.Use different types of credit.Your rating may be lower if you only have one credit product, such as a credit card.It is better to have a set of credit products, such as:A set of credit products can improve your credit rating, but you need to make sure you can repay the money you borrow. Otherwise, you may end up hurting your rating by accumulating too much debt.