Finance & Loans
What affects your credit rating?
October 17, 2014 by admin · Leave a Comment
We all know that credit cards generally affect your credit score which is measured as FICO. But do you know to what extent your credit cards affect your credit rating?
- Without a credit card, it may be difficult to start a credit history. But having a credit card could lead to multiple cards sooner than you think. Having multiple cards may produce the same result of having a credit card when it comes to establishing a credit history.
- Having a credit card is also needed to establish a credit rating. Without a credit rating, you may not be able to buy a home or purchase that LCD LED flat-screen TV that you always wanted.
- Many financial institutions, especially banks, consider you as a risk if you have multiple credit cards even if they carry zero balance.
- Carrying a balance on each of your credit card may help your rating rather than having no balance. Companies love to collect interest from you for extending credit to you. What is the healthy balance to carry on each credit card? Many thinks it should be around halfway mark of your credit limit. But you may want to pay off your balance on store credit cards as soon as possible.