Does consolidating your student loans hurt your credit
More importantly, spreading out – and paying down – your revolving debt is a good strategy.On the flip side, however, don’t apply for a bunch of new credit cards thinking you’re increasing available credit – especially if your credit is new.Each application causes a hard pull on your credit by the card issuer that will ding your score.Worse, card churning (rapid-fire account applications) can mark you as a credit risk.You don\u2019t have to pay your balance in full every month in order to establish payment history, but keeping it as low as possible will help with that big factor in your FICO score.\u201c Amounts owed\u201d accounts for 30 percent of your score.
Your credit cards are the best means of proving you can be trusted to pay back a loan – better yet, multiple loans – in a timely, consistent way.\n If you\u2019re trying to repair your credit or bump up your credit score, look no further than your own wallet.
More importantly, spreading out \u2013 and paying down – your revolving debt is a good strategy.\n On the flip side, however, don\u2019t apply for a bunch of new credit cards thinking you\u2019re increasing available credit \u2013 especially if your credit is new.
Worse, card churning (rapid-fire account applications) can mark you as a credit risk.\n It may seem complicated, but it\u2019s simpler than it sounds. They\u2019re looking at how we manage the revolving debt we have in order to judge if we can handle more.
Cards such as the Discover It (both the secured and unsecured versions) send your FICO score with your monthly statement, so you can keep track of progress.\n\u2013 and the rest of your bills too.\u00a0 Payment history counts for 35 percent of your FICO Score \u2013 the biggest chunk \u2013 and takes some patience to repair.
Consistent and timely payments are the single most important thing you can do to improve your score. Use auto-pay for recurring bills when you can, or set reminders for a few days before bills are due.\n Once a debt goes to a collection agency, it\u2019s on your record for seven years.
And while you won\u2019t get approved for a mortgage or other major loan without good credit, there is one form of revolving credit you\u2019re probably already managing: your credit cards\n Misused, credit cards can get you into trouble.