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How To Raise My Credit Score – 4 Financial Actions to Avoid

We all know maxing out a credit card hurts our credit score. But how much? How about filing bankruptcy? Does it totally ruin our score, or is there a way to bounce back? These are all good questions that, as regular consumers, we need to know the answer to. Hopefully “How To Raise My Credit Score – 4 Financial Actions to Avoid” will help clear up any concerns you may have.

We all use our credit cards in our daily lives, and many financial decisions we make affect our credit score directly. Read on and learn what actions to avoid and which good habits to build so as to make the best out of your credit card.

4 Financial Actions You Should Try To Avoid

According to an article in MSN Money written by Liz Pulliam Weston, depending on your score, the same financial action will affect your differently. For instance, the higher your score is, the more points maxing out your card will cost you.

Two different credit scores were chosen to see the effects of the following 4 financial actions: a score of 780 and a score of 680. Find out exactly how much missing a payment can actually cost you.

1) Maxing Out Your Credit Card: -45 / -30

2) Making A Late Payment: -110/ -80

3) Foreclosure: -160 / -105

4) Declaring Bankruptcy: -240 / -150

3 Good Credit Card Habits

FICO  explains how the financial actions listed below can help you improve your score. If you can make an effort to follow these habits, do it. It’ll be worth your time.

1) Keep Your Debt-To-Credit Ratio Low: below 30% is the best way to go. Creditors consider a consumer financially responsible if he uses only a small part of his line of credit. Hence, try to keep 70% of your credit line available.

2) Pay Your Bills On Time: If your debt is diversified (credit cards, car loans, mortgage payments) and you don’t apply to too many new accounts, your credit score will probably be boosted.

3) If You Go Over Your Limit, Pay It Off ASAP: it shows the creditor you’re aware of your financial actions and are willing to mend your mistakes. Just like going over your balance will lower your credit score, taking care of it will eventually increase it.

Keep Up the Hard Work

I know it isn’t easy to manage your credit cards well in a time in which money is tight, but trust me, you’ll reap the rewards of your hard work. By following the previously mentioned 3 good credit card habits, you’ll boost your credit score and be back in control of your financial life.

Hopefully “How To Raise My Credit Score – 4 Financial Actions to Avoid” has helped you understand what goes into calculating your credit score a little more in detail. Now that you know, you’re more in control to change your credit score, for the better or for the worse.

If your finances are going smoothly, congratulations! Keep up the hard work. If you’re already submerged in debt, don’t worry. And don’t feel guilty! You probably didn’t mean do it on purpose. Stop stressing out about your debt and, instead, do something about it! And whatever happens, don’t lose hope. There’s typically always a way out of debt.

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