Justin is a financial writer and an active participant in the Creditmagic community. He helps people in finding out ways to improve their credit scores and shares the most latest updates in the credit Industry.
Credit repair is all about improving your credit score and making sure that you have a clean credit report. Credit card is a good option to help you in Credit repair . Here are 4 tips on how you can rebuild with credit cards.
1. Using more than 1 credit card: If you have more credit available, then your credit utilization ratio (ratio of credit card balance to credit limit) will be low and this is likely to improve your credit score. Moreover, if you have unused credit cards, depending upon the credit limits and how long they’ve been unused, the credit card company can raise its limit. This will also help reduce the credit utilization ratio.
Moreover, if you’re buying a home in the next few years, then any negative item such as inquiries generated due to opening the cc account will not have any affect on your credit score.
2. Think before you close cards: If you have too many credit cards and wish to apply for a mortgage, it’s better that you don’t close the cards which have low balance or no balance at all.
As long as the cards (whether they’re open or closed, old or new) reflect on your credit report, they would be taken into account while calculating your credit score. Closing such cards won’t help you in credit repair. It will cause them to come off your report very soon. This may shorten your credit history and have a negative impact on your credit report.
3. How to keep cc accounts active: It’s best to use a credit card at least once in every 6 months to keep your credit card account active. This helps in credit repair such that you can maintain a good score.
4. Pay down cc debts: It’s better to pay down your debts in time if you have piled up good amount of cc debts. Lenders prefer to see a considerable gap between the debt amount reported on your credit cards and the total credit limit. The faster you pay off your debts, the wider will be the gap and the better will be your credit score.
Having too many credit cards isn’t bad if you know how best to manage them. All you need doing is to pay down the balances at regular intervals. However, if you have a new card, keep the account active so that it has a good impact on your credit score.
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