What’s the Best Way to Build Your Credit Score?
Obviously, to obtain the optimal card deals that can be used for air mile accumulation, your credit score has to be good at minimum. And though it is helpful to have a solid credit record that extends over the years, this is not the primary factor that is taken into account with respect to boosting a credit score.
While there are numerous factors that apply when your credit score is assessed, by far the key factor is that of payment history. In other words, if there are no negative marks on your credit report whereby your repayment track record is 100 percent (you’ve always paid in a timely manner).
Then, you should consider the amount that is owing, measured by comparing your level of debt to the size of your overall credit line, also referred to as “utilization ratio.”
Apparently, according to the “powers that be,” your credit score is made up of 15 percent credit history, and 65 percent utilization ratio. So the best way to build your credit score is to avoid borrowing too much simultaneously, and to pay your bills with a definitive consistency.
Keep in mind that maintaining a low utilization ratio is very beneficial to your credit score. Thus, if you have more borrowing accounts, inclusive of credit cards and/ or alternative means of borrowing, it should prove beneficial to your credit score.
This is not to say you should go mad. There’s no necessity for opening 12 new credit card accounts at the same time. However, simply because your credit is not particularly well established, it should not do much to harm your credit score.