My Credit Cards Blog

Now come the strategies of getting and maintaining a high credit score. There are many different versions of how to out getting high credit score; below is just my own version.

1. Minimize your credit utilization - Credit Reporting Companies (CRCs) take the amount you owed on a single card and the percentage use of your overall credit limit into consideration. My rule of thumb is never go over 70% on any single card and stay less than 50% of your overall credit limit on all cards.
2. Pay your bill on time - never, ever be late on your bills, especially pass the 30 days mark. You will see your credit score drop dramatically if this ever happened.
3. Attain higher credit limit - back to number one, you can always minimize your credit utilization by increasing your credit limit. This can be done by continuing calling credit card companies to increase your credit limit or having a Home Equity Line of Credit (HELOC).
4. Avoid hard inquiries- hard inquiry is always done whenever a new application for a credit card. Make sure the inquiry is worth it before doing so. Sometimes check your credit report to make sure they don’t pull more than once.
5. Do not close accounts of old credit cards - your credit card history plays a big role into determining your credit score. The more established cards will result in higher credit score.

Now here are some trickeries to increasing that credit score.

1. Continue calling calling Credit cards’ CSR to ask for higher credit limit without doing a hard pull. Do this once every three months on all cards.
2. Ask to allocate credit line to your older cards to maximize credit limit, then close the just opened accounts with low limit.
3. If you want to build your kids’ credit score, add them as an authorized user to your best credit card. By 18 years old, they will already have an established credit history. This can be done with a mortgage loan too.
4. If you are looking in increase your credit limit, play the App-O-Rama game in an hour time frame to avoid multiple inquiries. You will take a credit beating, but it will go back up once the six months mark is over.
5. If you are young, try to keep your official residence in one place such as your parents on your credit report.

It’s also a good idea to check up on your credit report often. If you want a free credit report, check out www.annualcreditreport.com for a complete free report each year. For a free monthly credit score, the best way I know how is getting a WaMu credit card. It’s the only card that gives you monthly free score.

Understanding the importance of a high credit score is a must for anybody who wishes to stay financially healthy. Here’s my first part to keeping credit score high.

Before we go into the strategies of keeping credit score high, why do we need it high? If your score is above 750, you are most likely to pay lower premium on car insurance and house insurance, better rate on your mortgage and car loan, and even employers look at your credit history to see if you are responsible to hire you.

Of course nobody came into this world and has a score of 750 or higher right away. Unless your parents have added your name to their mortgage or credit cards as an authorized user, your credit history starts when you reached at the age of 18 years old.

At the beginning of your credit history, you are most likely to open a checking account and savings account. Most likely your score is adequate around 650 reported around the big three credit reporting agencies (Transunion, Equifax, and Experian). These big threes are private companies that each have their own scoring model to designate your score. Since they keep it extremely secretive, no one is for sure one strategy will work over another.

Keep in mind, no two credit profiles are alike, hence many factors can contribute to your credit score. These includes, but not limited to, the age of your account, your payment history, and your debt/credit limit ratio.

Another factor is how your credit is collected. If you have a business card, the balance you carry each month is never reported to the credit agency. However, all personal credits card will report your credit limit, the balance, and the minimum payment due.

Since there are many ambiguities in the world of credit reporting, here are a few known facts to keep in mind.

1. The relevant of high tech has allowed them to report your credit inquiry much quicker. Just because you did twenty inquiries in 1 hour on an app-o-rama doesn’t mean they won’t know till tomorrow. These inquiries are reported in minutes or hours.
2. Secured revolving lines of credit such as HELOC is different from an unsecured line of credit. Your credit cards are unsecured lines of credit, hence play a more prominent role into your credit rating.
3. Rate shopping on your car insurance, house mortgage, or car loan are usually grouped together within a 14 days window. In doing so, it will only count as one credit inquiry. Of course, credit cards’ inquiries do not get this same treatment.

Come back tomorrow for the second edition of keeping your credit score high with all the strategies.