It’s 2024! Can you imagine your life without a credit card? Well, I doubt it. This financial instrument has undoubtedly been offering convenience and rewards and is considered a powerful tool to build credit in the long run. Moreover, it is known to help individuals during their tough times by offering leverage of not paying from their pocket immediately.
The credit score boost it provides by this leveraging power is known to some but what is not truly known is how it may affect your credit score in various other ways. We all know some of its basic principles, but there are several other not-so-basic factors as well that can play a huge role in your credit score.
Well, in this blog today, we are going to clear the air and make you aware of these important factors that will help you manage your score in the most effective way possible. Follow along the article to know more!
Credit Utilization Ratio
Credit utilization ratio is another very important factor for your credit score. The utilization ratio is the credit card balance you are using against the credit limit. It is always better to keep your credit utilization below 30%, but to give it more effective leverage, keep it below 10% instead!
Hard inquiries(New Credit)
Every time you apply for a credit card, the card issuer inquires for your record. A single credit inquiry hardly affects your credit score, but multiple credit inquiries within a short period may sound like a red flag for creditors and they may turn against your credit score in the long run.
Credit card churning
Credit card churning is the practice of frequently opening and closing credit card accounts to reap the rewards of signup bonuses. Opening many new accounts may seem to have a negative effect on your credit score. If a new account is added, then the overall average age of the credit records will go down.
Length of credit history
The length of your credit history, or how long you’ve held your credit accounts, plays a significant role. This factor basically includes the age of your oldest account, the average of all your accounts, and lastly, the age of your newest account.
Joint accounts and authorized users
Authorized users on an existing account is also a type of credit account which comes under your own name when you become an authorized user on someone else’s card. This can prove beneficial to your credit score if the account holder is a good user always but can be quite risky too in the case the account holder isn’t.
Best Credit Card App in 2024
If you are planning to avail of this card this year, then go for the ‘Bajaj Finserv’ app. The overall interface of the app is quite user-friendly and will guide you with step by step instructions as well. Here is how the process goes:-
- Download the app on your phone
- Enter your mobile number to Signup/Login
- Tap on Credit Card at the home page only
- Proceed further and fill in the details
With just four easy steps, you can easily apply for a credit card via this credit card app while sitting in your comfort zone. Moreover, once you avail yourself of this facility, this application will be seamless when it comes to managing such finances. For those looking to improve their credit score, integrating credit repair software alongside the app can provide a more comprehensive financial management experience. Apart from credit cards, it also offers loans, recharges, etc. It is highly recommended.
Final conclusion
Wisely managing your cards is not just about paying your dues on time. You can better keep track of your credit score and make informed financial decisions if you educate yourself and keep an eye on the above-mentioned factors.
Therefore, always have a comprehensive approach to optimize your score and enhance your overall financial well-being. Lastly, don’t forget to initiate your credit card payment on time!