6 Steps to The Perfect Credit Club
There are tips on how to get into the perfect credit club, and it’s not as complicated as you might think. Improving your credit score by mastering good financial and credit habits will help you unlock the ultimate credit status.
According to credit bureau Experian estimation, your credit score is valued at around 800-850 (FICO Score) and 781-850 (VantageScore).
Only 4% of Credit Sesame members have a credit score of 800 and higher. You also have a chance to join that elite club by applying these six steps you need to know.
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Set an Automatic Schedule
Late payments are the most significant reason you can’t get an excellent credit score. Both FICO Score and VantageScore put payment history as their most influential aspect.
That’s why it’s essential to always pay on time. Avoid late payments by scheduling automatic payments on or right after your paydays.
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Be Prepared
Be prepared for any unexpected cost by saving a certain amount of money every week. Keeping $20 weekly will get you $1000 in less than a year.
Emergency funds are essential to help you avoid using credit cards. You can never predict what kind of unwanted incidents will happen and how much they will cost.
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Use Credit
To improve your credit score, you must be responsible for your history of credit products. You can finance a purchase and pay it off early if you can afford to.
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Avoid Applying
Applying for new credit will affect your credit score by a few points. Moreover, new credit accounts also lower the average age of your credit accounts. It’s best to avoid applying unless you have no choice but to do it.
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Keep Balances Low
It’s essential to keep your utilization ratio low since it accounts for 30% of your score. Utilization rate refers to the total amount of credit you use compared to your total credit limit.
To avoid a high utilization ratio, pay off your charges on time to avoid interest, and don’t max out any of your cards.
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Keep Tabs on Your Score
Keep yourself aware of any progress happening in your credit. You can do it by signing up for a free Credit Sesame account.
This way, you can access your free credit score and credit report card. Watch your progress and learn where you have room for improvement.
Conclusion
Having an excellent to perfect credit score can be financially beneficial for you. It might be challenging to get a perfect credit score of 850, but you always have the chance to get there by applying those tips above.
If you want to study more about credit, check out our Commonly Confused Credit Terms.
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