So you’ve been getting offer after offer after offer in the mail. And you’ve decided to give in to those credit card companies that keep hounding you and open up a new account. Before you go ahead and open that new account, take a few moments to think over the possibilities awaiting you and also to compare credit cards properly. Credit cards are as diverse as ever and it pays to know what each one offers you before filling out your credit card applications.
Can a credit score have health? Yes, so examine your credit score and see how it stacks up. The types of deals you are able to get, remember, are dependent on this vital piece of information, that one handy number.
Go back in time and see your transactions history. Have you been making your payments on time? You can’t change anything at this point, but it’s extremely helpful to know what your track record is like.
If you have a lot of inquiries on your account, be aware that it may be tricky for you to find a low interest credit card. Card issuers can get wary, if they see repeated inquiries.
It was a nice gesture at the time, sure. But you may pay the price if you decided to help out a financially unfortunate friend or family member. And if they haven’t been keeping up their payments as expected, you could be the one suffering.
Evaluate your spending habits and when you tend to pull out the plastic. You may want to take a break on making credit card purchases before you go ahead and apply for your new account. If an issuer thinks you are overusing your card, than it will be much more challenging for you to get a better account.
Be aware that most lenders know open references are subprime account. That is, any of the following: high rate credit cards, secured cards, or other loans. The credit lender is almost like Big Brother in this sense: they also know that you are paying high interest rates as well as any former credit or financial problems that may have befallen you. Credit lenders are just as wary in these scenarios and you might not even know that you have a “subprime account.” And when applying for a credit card through a store, always ask a store about the lender they use for their store credit cards. A lot of these count as subprime, too.
Inconsistencies in employment will make the credit lenders even more squeamish, as they are left to wonder about your overall income status, and therefore, your ability to repay your balance to them adequately.
Historically good payments are a nice 15% of your respective credit score. So don’t be too brash when it comes to closing accounts. Because as they vanish, your score WILL go down. Your “debt utilization” will then be affected, because you no longer have access to that once-good, now-destroyed credit.
This equation exists: in order to get credit, you must have credit. If you are one of those people that prefer cash, you may be putting yourself at risk when it comes to opening up a new account. Keep a credit card around for emergencies and use it on small, safe purchases, just so you can keep your credit alive.
No one is perfect and such as that, credit reports can often be riddled with mistakes. To avoid this catastrophe, carefully check your credit report at least once per year.
With these entire steps take into account, you should be ready to open a new credit account. Compare credit cards and know what you are in for with each variation out there.
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