The credit score is approximate to risk, and it reflects in your credit report. Granter uses this score to decide how likely you’ll repay a loan or line of credit.
Managing innumerable bills simultaneously is a daunting task. If uncertainty occurs like job loss, recession, inflation or another financial crisis, you might face overdue payment dates and it’s hard to pay.
The overdue date is considered as 30 days past the date of purchase. An overlooked bill won't hurt your credit score, provided that you pay the bills before 30 days with late fees.
Constraints in building and maintaining a good credit score
Using more than 30% of your accessible credit is one of the reasons that constrains you from maintaining a good credit score. Keep a comprehensive view of the types of credit accounts, the average duration of your accounts, recent credit applications, gross balances and debts, and be on time with payments.
What constitutes a credit score?
The credit score constitutes the amount owed, 30%; payment history, 35%; length of credit history, 15%; new credit, 10% and credit mix, 10%.
Tips to overcome late payments
Many credit card issuers allow you to set your due date according to your payday or clump them up to remember. You can set text alerts or calendar reminders, then and there. You can do this through diverse electronic pokes.
Automate and regularise the payments. Try this only without risking your overdrafts by opting for automated payments. You can make payments as soon as the billing statement is issued. Do not wait for the month to end to make payments. You can schedule your payments at the end of every week or every 15 days. This will help maintain low credit and achieve credit utilisation.
Pick a credit card that suits your needs. The market is flooded with innumerable credit card companies. Do not opt for a company just because a friend recommended it to you. Take a look at our BankQuality website for guidance on credit cards and various banks.
Secure a credit score
A credit score can’t be built overnight, but it can be damaged overnight. Do not apply for a new credit card if you are in a rebuilding mode. Reduce total debt including personal loans and credit cards. Lessen your credit-to-debt ratio by ignoring to close a credit card, especially if it's been in use for more than three years. To secure your credit score, develop good behaviour. It requires months of patience and consistency to reach the ideal three-digit credit score.