How to maintain a good credit score?
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I'm thinking about applying for a credit card, but I've come across information suggesting that having a solid credit score—usually over 750—is really important. Could you clarify what a credit score actually is and share some tips on how I can keep it in good shape?
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Credit scores are basically numbers (usually ranging from 300 to 850) that lenders use to assess your repayment reliability. A score over 750 is considered excellent and secures better interest rates and loan terms.
Tips for a Healthy Score:
- Pay bills on time: This is crucial for avoiding late payment penalties and damage to your score.
- Keep credit card balances low: Aim to use less than 30% of your total available credit limit.
- Avoid opening too many accounts quickly: Space out applications for new credit.
- Check your credit report regularly: Look for and dispute any errors.
- Maintain a good credit mix: Having different types of credit (e.g., credit cards and loans) can be beneficial if managed responsibly.