So lets say someone has bad credit or no credit in general.
How can they maximize this to their own benefit or in case shit falls apart. (Assuming you have a credit line of 50k+ and you just loss your job etc)
Whats the best way that you know of that allows you to build credit effectively?
So lets say that i use my Credit card and pay for my groceries. But i connected my Debit card to my credit card so whenever i pay for things , it charges my credit card and automatically pays off my credit card debt.
Should i keep my credit card utilization under 30%? Should i get multiple credit cards to build my credit?
Depending upon country to country the rules might change slightly, but in general the aproach should be similar..
Like you said,
Credit card utilisation under 30% is not bad because your credit utilisation ratio would have a significant impact on your credit score itself, so the more you are able to restrict your credit usage as per the allotted limit, the better it is for your credit score as a whole..
If you hold too many Credits Cards then it's more likely that your Credit Score would be lowered down or affected slightly, because if you request number of Credits Cards frequently then the card issuer assumes that you likely have a more debt and this is an indirect alert to the Credit Card provider itself and they might feel that you could be a risky customer to assign a higher credit limit and hence there is a possibility that the initial credit limit assigned on the card would be loo.
Another thing is, just ensure that you maintain older credit cards (
i.e. a Credit Card issued to you by the bank like 8-10 years ago) as it will help you build a strong and lengthy credit history, which in turn will help you to increase and maintain a better credit score in the future..
If you have a standard portal (i.e. Website) in your country where you could check your Credit Score, visit that website and check if the entries over there are updated or any False/Invalid entry exist.
The website shall provide you with the number of credit cards that you hold until today and it's payment history, credit card age etc.
If you see any information that doesn't look correct, report that immediately to the concerned authority and get it updated asap.
Apart from the above tips, there could be some more tips and tricks that other members on this forum can contribute, but in general the rules are somewhat similar as mentioned above..
Pay using your credit card and pay the credit card bills on or before time and it should give you a good result.
Should i get multiple credit cards to build my credit?To answer your question once again it's a big No, holding too many Credit Cards would have a negative impact only, it's not fruitful at all, to avoid it.
