How To Maintain A Good Credit Score

Would you believe that a three-digit number can greatly affect your financial future?

You get an A if you excel in school and an F for poor performance. Much like how test scores measure the learning ability of students in class, there’s a scoring system in the world of finance that can assess the financial capability of a person.

A good score will improve your financial portfolio and also provide a wider set of opportunities for your financial plan to grow. So get those cardholders ready ‘cause this is the time to know about the basics.

What Is A Credit Score?

A credit score is a number that can range from 300 – 850 that is used to determine if a person is worthy of credit.

Fair Isaac Corp., best known as FICO, was the one who crafted the system. There are also other scoring models like VantageScore that can monitor credit scores; however, FICO Score is more commonly used by lenders in the financial field.

Credit scores are to be taken seriously. It’s not like typical test scores that can be brushed off if it gets too low. It can reflect how a person manages his finances.

Lenders review their potential borrowers well. And credit score is one—if not the most important factor they consider. People with low credit scores are often rejected by creditors compared to those with high reported credit scores.

What Is A Good Credit Score

There are three major agencies that provide credit reports to people. These are the TransUnion, Equifax, and Experian. These bureaus consider several factors in calculating a credit score: new credit, types of credit, credit transaction history, length of credit history, and total debt.

So unless you want creditors to ignore your credit inquiries, it’s better to keep a good credit score at all times.

What Is A Good Credit Score?

A good credit standing is a must. As mentioned, FICO has established a scoring system that can help people to assess their credit level.

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very Good: 740-799
  • Excellent: 800-850

Why do I need a good credit score?

Borrowers with credit scores that are within the 300-640 range fall under the subprime borrowers. These people are considered to be a high credit risk for creditors. This can affect the loans or mortgages that they can avail of. Lenders often charge higher interest rates for low credit scores because of the risks.

Meanwhile, people with credit scores that are higher than 700 have the chance to pay less on interest. They are also subject to better financing opportunities if they can reach 800 and beyond in their credit score.

Aside from better chances on the credit application, a good credit score can also affect the amount of initial deposit that you need when availing gadgets on installments,  subscriptions, or real estate.

If you’re dreaming of getting a house and lot in Daang Hari or a property at Forresta Luxury Lots, it’s about time to level up your credit score.

Is There A Credit Score In The Philippines?

The credit score system is globally utilized in finance. That includes the Philippines. However, there aren’t many people in the country that are aware of their credit history or position.

The factors considered in the calculation for credit standing may vary in different countries. Credit score in the Philippines can be affected by the following:

  • Annual salary
  • Ability to pay
  • Age
  • Debt history

Despite the slight difference, the same advantages can still be enjoyed if you keep a good credit standing in the country. So it’s best to regularly monitor it from time to time.

How To Improve Your Credit Score

How can I check my credit score in the Philippines?

Looking to avail a house and lot at Forresta subdivision in Alabang? Check your credit score in the Philippines to see how you can maximize your credit.

Checking your credit report in the Philippines is a little different. Equifax and Experian don’t exactly operate in the country. However, you can still obtain your report through other means.

The Credit Information Corporation, also known as CIC is the main agency that can help you out in monitoring your credit score. CIC has a website you can visit where you’ll need an account to grab a copy of your credit standing as well as your credit history.

Before going through the online application, there is a verification process called Know Your Customer which you will need to complete. In case you don’t qualify online, you may also visit the CIC headquarters in Makati City to access your credit data.

If that doesn’t work out, TransUnion is there to provide your credit score. This worldwide agency is also the country’s first credit bureau. Check out the TransUnion website to request a report on your credit score. They offer two different types of reports. TransUnion can issue a business report for lenders, banks, and insurance companies. The other is a personal report for those individuals who wish to monitor their credit.

How To Improve Your Credit Score?

If you want to get a house somewhere in Alabang, perhaps in Forresta Luxury Lots or a house and lot in Daang Hari, you’re gonna need to have an excellent credit score. But if you’re far from that, don’t worry ‘cause there are tips that you can use to acquire and maintain a good credit score.

Apply For The Credit You Need

The first thing you should consider is the credit that you need. It’s unwise to apply for too many credit plans or get the wrong one for what you need.

So before you proceed, be 100% sure that you need that credit. If you apply for a lot of credit over a short period of time, it may appear to lenders that you’re in a negative financial position.

Use Your Credit Wisely

Using your credit card periodically will maximize its purpose. Transactions contribute to your overall credit score so don’t let those credits go to waste, spend it wisely.

Spending your credit can earn you rewards. Buy gas or purchase groceries with it. Just don’t forget to pay back so it won’t negatively affect your credit score.

Maintain A Good Credit Balance

To keep a decent credit score, your total credit card balances should not go over 30% of your total credit limit. Otherwise, your credit score will suffer the more your credit card amount exceeds.

The best course of action is to monitor your accounts online and make payments sufficient to bring your balances as near to $0 as feasible right before the billing month ends.

Use Your Credit Wisely

Pay On Time

Punctuality is key. Keep up with your credit balance by paying on time. Your credit score can be negatively affected by delayed or missed payments on your existing loans and bills.

To ensure that you don’t miss a due date, try an automated bill payment feature to stay on track. Set up your autopay for your active credit cards so you can make regular payments throughout the year to keep a good credit balance.

Maximize Old Credit Cards

Upgrading to better credit cards is good but you don’t necessarily have to close your previous accounts. The credit history that you’ve accumulated on your first credit card may contribute to your overall FICO Score. So don’t close the account yet unless you want to risk your Credit Utilization Ratio (CUR). Closing your credit card can and will affect your credit limit and lower your CUR.

Maximize those old credit cards and keep them active by using them for a recurring subscription like Netflix via autopay.

Here’s the catch on this tip though, if the card requires a high annual fee or it doesn’t fit the budget that you have any more, then canceling it will be better.

Check Your Credit Card Reports

It pays a lot to check your credit reports frequently for errors as it might lead to a drop in your credit score.

Watch out for cases like Identity theft or credit card fraud with your accounts. Maintain a good credit score by regular check-ups on your credit.

Keep In Touch With Creditors

Finally, make sure to have regular contact with your creditor especially if you fall short on your bills. There are lenders that you can negotiate with for alternative payment methods as long as you can inform them ahead of time.

Once you’ve applied these tips, you’re sure to achieve a better credit standing in no time. When that moment comes, you can enjoy the benefits of maintaining a good credit score. You can upgrade your phone, buy a cable service, or finally get that dream house of yours.

Speaking of houses, make use of your credit score by checking out Brittany Corporation’s house and lot properties. From Daang Hari subdivisions to Forresta Villar Land in Alabang, there will surely be a home fit for your credit.

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