Your credit rating is composed of a number of factors that contribute to your credit score- that three digit number lenders or businesses take a look at whenever you’re applying for a loan or utility service. Most of the time, we only think that paying our bills on time will give us stellar credit scores, but that’s not the case. Today I’ll reveal some credit secrets that you probably don’t know.
First, getting a new credit can lower your score. Some people might have heard or have been raised to believe that if you’re trying to fix your credit, apply for a new one. However, what most of you don’t know is that each time you apply for a new credit card, for example, the average age of history will shorten, which is actually damaging to your credit.
Second, closing old accounts can hurt your credit as well. Working on the same principle as above, when you close accounts that have the longest age of credit, your credit age will shorten and lower your score. So I’m telling you, always, always leave old accounts open and active. If you really have to close some cards, close the new ones. Just in case you are suffering from bad credit and still want to get a phone for yourself, bad credit contract phones can be an easy option for you.
Lastly, credit limit is your friend. Many people think that having less credit limit can pull them away from temptation. Unfortunately, if you’re a bad borrower, you’re still a bad borrower, no matter what your credit limit is. Creditors check how you use credit which is available to you, and it kind of gives them a red flag when they see that you are maxing out your credits. Remember that it is better to keep a card with a large debt but with higher credit limit, than max out the limit of your low-limit card. But of course, don’t abuse the borrowing power of your high-limit card.