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Bad credit history, in the case of most people, is of their own making. The credit score goes down and the history is tarnished primarily because of over expenditure and inconsistency in payments. Given the importance of credit history to every individual’s chances of getting cheap insurance, loans and better credit card terms, it is worth the extra effort. Here are 7 credit card tips which can help you recover from bad credit history and raise your credit rating.
Pay the bills before the due date
If you have the money, and your bill is with you, make the payment as soon as possible. Consistent bill payments over at least 6 months, is considered to be a positive sign and will significantly enhance your credit score. You also avoid the risk of ending up cashless just before the due date.
Spend only if you can pay
Credit card was created more for convenience than for giving out loans. That is why the interest rates are so high compared to personal loans. As a result, you should spend on your credit card, only when you are sure, you can repay the card debt at the end of the monthly cycle. In other words, swipe the card, only if you have cash in your bank. When in doubt, it is good to refrain. Preparing and preventing is way better than repairing and repenting.
Check your expense statements thoroughly
By doing so, you will able to spot fraud charges as well as dubious expenses that you haven’t made with your card. Avoiding them reduces your bill amount and more importantly keeps you aware of card frauds, if they are happening.
Don’t shop for rewards
Rewards shouldn’t be an incentive for shopping. The simple rule of thumb is to purchase only those items which you would have purchased even without rewards. When you shop for rewards, rest assured that you will spend more than what you are in line to gain.
Don’t incur penalties
Each card has its own set of penalties, including late fee, over draft fee and cash withdrawal feel, to name a few. Incurring these penalties, adds to the bill amount that you have to pay at the end of the month. Such events also land a body blow on your chances to repair your credit history.
Don’t use credit card as an ATM card
Although a lot of credit cards, allow you to withdraw cash from a network of ATMs, avoid doing so, unless in an emergency. If you fail to repay the debt, you pay a high interest on the cash and you will also negate your positive efforts to repair the bad credit history.
Don’t close old credit card accounts
The longevity of your card account and history, adds valuable points to your credit score. Even if you are not using a credit card, don’t close an account which has a long history. You can always cut up the credit card itself to be on the safe side.
