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.
However, their impact on your credit score is often misunderstood. While many are aware of the basic principles—such as paying on time and keeping balances low—there are tons of other factors that can significantly affect your credit score.
Today, in this article, let’s understand all these so you can manage your score effectively and optimize your financial health.
- Utilization Ratio
This is another crucial factor affecting your score. This ratio represents the amount of credit you are using relative to your available credit. Always remember to keep it below 30%, but for optimal impact, aiming for under 10% is even more beneficial.
- New Credit
Every single time you attempt to apply for a new credit card, the issuer performs an inquiry for your record. While a single inquiry might have much less impact, more than one inquiry within a brief time period can signal threat to creditors and in the long run decrease your score.
- Credit Card Churning
This refers to the practice of often opening and closing credit card bills to take advantage of signup bonuses, which may be negative for your credit score. Keep in mind that each new account can cut down the average age of your credit records!
- Credit History Length
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
Being added as an authorized user on someone else’s card can impact your score in a positive way if the account holder has good credit habits at all times. However, negative behaviours by the account holder can harm your score.
Best Credit Card App in 2024
If you plan to avail of this facility in 2024, you should go for the ‘Bajaj Finserv’ application. The overall interface of this platform is relatively user-friendly. Here is a step-by-step guide:
- Download the application on your smartphone
- Sign up/Login using your mobile number
- On the home page only, tap on Credit Card
- Proceed further
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. Apart from credit cards, it also offers loans, recharges, etc. It is highly recommended!
Final conclusion
Managing your cards wisely is more than simply paying your bills on time. By expertise and tracking the factors stated above, you can better manage your credit score and make knowledgeable monetary decisions.
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!