Many myths have existed in regards to how one can maintain a clean credit history; however I believe that a good credit is mainly about how you manage your balances. Considering all the future loans depend on having a great credit score, it is usually important that one is very careful with how they maintain their balances. The three ways listed below are some of the simplest methods through which one can maintain a clean credit history.
1. Avoid shifting the balances from one card to another
As a chief financial officer to your own business, you may feel tempted to utilize the zero percent Annual Percentage rate offers that one receives in the mail and move your balances from the a cards with higher interest rates to one with lower interest rates. This is however a bad move since they credit bureaus take it as a warning sign that you have insufficient money to settle your bills. It would be advisable to pay off the debt instead of moving it around.
2. Timely payment of bills
Settling your personal bills on time is the best way to maintain a good credit history since it indicates your responsibility and money management skills. When making payment to vendors, one may consider stretching out payments as it will help with maintaining a firm’s cash flow but this should be avoided when it comes to personal loans. Making any mistake of delaying payments may be the beginning of a bad credit score which may not only affect your personal loans but it may also make it difficult to get a financing for your business.
3. Spread out your balance among multiple cards
Although you may feel like charging everything on one credit card with the aim of getting more reward points, operating on one or two credit cards may lead to one maxing out on the cards and this may raise an alarm to the credit-card companies. When the credit card companies observe high balances on your card they will assume that you are living off credit and they may get nervous. Therefore it is advisable that one acquires multiple cards that you can use for different financial activities and this will help maintaining the balances below the 50% credit limit. You could consider borrowing in some cases just for the sake of maintaining the balances at a minimum.