Facts about Credit Cards and your Credit Score
Do you think you know the secret to a great credit score? Most of us certainly seem to think so, but there are quite a few factors – many of which we are not aware – that can have a big impact on your credit score.
- To activate or not activate – Many individuals think that if they don’t activate the credit card they receive in the mail then it won’t show up on their credit score. Unfortunately, this is not the case, as the account shows up as being active, even before you activate it. So if you change your mind about a credit card somewhere between applying for the card and activating it, know that the account has already shown up on your credit score. Your best bet is to make sure you take the time to understand whether a new credit card is right for you before you apply for it.
- What you don’t know about can hurt you – If you think you are in the clear because you pay your bills on time, you may be wrong! Many people have incorrect information on their credit reports that ultimately damages their credit scores and their chances of getting competitive interest rates on everything from cars to homes. Your best bet? Always take the time to check your credit score to ensure that the information that is on it is accurate. Most financial analysts recommend checking your credit score at least once a year.
- Paying your bills on time are just one part of the equation - You pay all of your credit card bills on time each month, so you must have great credit, right? Most people don’t realize that bill payments are just one part of your credit score. Another large part of your score involves the amount of open credit on your credit score. In other words, if your credit cards are maxed out, regardless of whether you are able to pay your monthly minimum payments, your credit score may take a hit because you have very little available credit.
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