How to Utilize My Credit Card for Better Credit Score Report (My Personal Experiences). credit card utilization impact on credit score
Credit Card Utilization for Best Credit Score
Based on my past bad experiences with credit cards. I can now sit and advise my old self on proper credit card usage. The new me is more knowledgeable and enlighten on saving and spending my finances. My credit card debt story was highly triggered by traveling and luxurious living. I lived beyond my means to prove to the world I have made it. We never got the privilege to travel for vacation or get expensive toys like my friends in my childhood years. I know the experience could have taught me better financial planning. However, I had a different perspective, seeking approval in the wrong way.
I acquired my first job at 21 years and immediately, I got a credit card. This felt mature by then, but I regret ever rushing to gain the card. The main reason was to build my creditcard score to benefit from loans, mortgages, and other financial benefits. I was lucky not to have any student loans since the college and organization funded my education. This was the best chance to start without any debts and create wealth. However, I messed my finances and got into debt.
My first mistake was moving into an expensive city which I couldn’t sustain the expenses. To create a credit report, I started purchasing items using the cards. I had two jobs, though the costs were still high. I managed to keep up with the pace but not for so long. The card interest rates accumulated, and my debt grew.
To add to the mistake, I shifted to several apartments, trying to cope with the rent. Moving wasn’t the issue but changing the addresses and contact was. Every time I moved, I didn’t change my first address, meaning all the bills were sent to the same address. The bills increase only for me to learn when it was already late. To curb the problem, I moved to a different city, trying to start a new life. However, some companies sued me this total affecting my credit card history. I had to face my demons and get myself together.
First, I secure a job two jobs that were highly paid. I rented an affordable apartment and only lived on what I could afford. I open a saving account which I funded 20% of my income. Me would then purchase my food items and the reminder to share among all the debts I had. We attacked my debts in small installments until I was done. To avoid going back to the debt, I constantly change my address and keep low spending habits. Though credit cards introduced debt in the first instance, I disciplined myself and proudly offered tips for making a healthy credit card report.
1.Keep Your Utilization Habit low
Credit cards are designed with credit limits based on the credit amount. The limit is determined by the period you have held the card, usage, and history. However, to grow your scores ensure to keep off the limits. You can decide on the percentage by which you would like to spend to avoid accumulating interest. To avoid the limit, you can have multiple cards or spend less.
2.Increasing the credit card limits
This doesn’t quite make sense based on the first point of avoiding your limit. Once you discipline yourself on spending, the limit is never a bother. You can request your credit card provided to increase your limit. This only happens if you pay your creditcard debts on time. In my case, my increased limit helps me spend less even though I can access more. It matter of tuning your mind. Note when you have less, you always want to spend more. However, when exposed to more, you don’t even get bothered by the much you possess. This also increases your scores, giving you a better position with your creditors.
3.Treating your credit card as a debit card
Don’t just spend because you can access the funds easily. Use your card as a debit card and utilize what you have or less. This keeps you from overspending, which might cause unplanned debts.
4.Use your credit card for payments.
To cultivate your credit card growth, you need to use your credit card to increase your scores frequently. You can build the score by making weekly payments instead of the end month bill payments. I paid most of my expenses using a creditcard, and it boosted my scores.
Today am debt-free and have a health credit card report. It’s not easy rebuilding your report, but once you put your mind to it, the scores will drastically change. Note various websites are claiming to help build creditcard scores. Please don’t be a scam victim; work your way by planning your finances and paying off debts. The score is only rectified once you clear the debts and start utilizing the credit card correctly.
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