Credit card score is a very important factor nowadays. It does not matter which credit card you are using- Visa, MasterCard or American Express, if you are having good credit card score, there is a chance that you will get lower interest rates on credit cards and loan products. But, raising credit score is not as easy as it sounds. Especially, when people are losing jobs, economy is going down due to COVID-19.
Money Management International is a United States network of non-profits that provide consumers with free credit counselling and education. Jim Triggs, president and CEO of this non-profit agency tells CNBC Select regarding this, “Understanding the specific circumstances as to what is impacting your score is your first step in understanding how to quickly increase your credit score”.
According to Triggs. Chipping away at your revolving debt can have a major impact on your credit card score. This is because it helps to keep your credit utilization rate low.
Triggs says, “How quickly [your score can go up] depends on how quickly the individual creditors report the paid balance on the consumer’s credit report. Some creditors report within days of the payment, some report at a specific time each month”.
Credit card companies generally report the statement balance of the consumers to the credit bureaus monthly. However, the entire thing depends upon the credit card issuing company. Consumers can even chat or call online with the credit card issuing company. To know when they report statement balance to the bureaus.
The sooner you can pay off your credit card debt; the better it will be for your credit card score. You can also make multiple online payments toward your balance throughout the month. Although it helps you to pay off some portions of your credit card debt, paying off the whole balance will have the biggest as well as the fastest impact on your credit score.
According to Triggs, consumers can either ask for an increase on their current credit cards or they can apply for a new card. Available credit card limit and credit utilization rate are inextricably related to each other. The higher the former is, the lower the later will be. However, you have to make sure that you will not spend more than you can afford to pay off before asking for a credit limit increase.
Triggs says. “It’s more important now than ever to do your research before applying for new credit because issuers may have stricter terms and requirements in wake of the economic fallout from coronavirus”.