Best Ways to use Credit Cards to Increase Your Credit Score

We often tend to blame credit cards for poor credit score and falling into the trap of debt. The bitter reality that low credit score and debt cycle can cause lack of financial support and self-control.

A well- chosen credit card is, in fact, an effective tool to increase your credit score.

Read this article to find the best way to credit cards to increase your credit score. Scroll it down. Have a happy reading ahead.

  1. Use credit card to build credit history: The best way to build credit history is without incurring cost to avail a credit card. Just like loans, credit cards do not incur any interest cost as long as you pay back the left over dues in full or do not avail any EMI or loan option. Credit cards offer benefits like cash backs, discounts and many more. It this is used wisely, you can come up with wide profit margin. If you cannot avail credit cards, take an option for security cards.
  2. Try to pay back bill by due date: Credit card issuers have a report card transactions to the bureaus for calculation credit score. Delays and default often leads to low or reduction in credit score. So it is better to use your credit for the expenses that  can be repaid by the due date. You can convert your credit cards to EMI if you have a huge amount to pay.
  3. Your credit utilisation ratio within 30% : This ration is the percentage of the total credit limit used by you. Lenders usually prefer lending to those having credit utilisation ratio is within 30%. So try to aim at limiting your credit utilisation ration with 30%. But if your credit utilisation percentage exceeds 30%, you can request for an additional credit card.
  4. Try to avoid multiple credit card applications within short time span: If you use multiple credit cards within a very short time span, you will end up with low credit score. Instead of making direct application with multiple card issuers, you can visit various online sites to compare your credit offerings. It can actually increase your credit score without having bad impact on them.
  5. Close your old credit card very carefully: While closing your old credit card, there can be the average reduction of your credit facilities and can also lead lenders to reduce your credit score. So to reduce the impact on your credit card score from closing old credit cards, request other credit card issuers to request their credit limit.

So these are best 5 ways to increase your credit score by using credit cards. Try these ways, we assure you that you will end up with high or wide margin.

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