Credit Card Quick Tips

Repairing or maintaining your credit doesn’t have to be a pain. Take baby steps and start by looking at your credit card debt. Check out a few credit card quick tips below and put in the little bit of work to improve your credit score.

Remember the number 30
Your debt should not exceed 30 percent of your total credit limits.  The 30 percent rule also applies to each individual credit card, so if one of your credit cards has a $500 limit (for example), you should owe no more than $150 on that card. If you have 3 credit cards with a total credit limit of $15,000, your debt should equal to $4500, or lower.

Extra tip: 30 percent of your FICO credit score is based on your total debt amount. [source]

Why making timely payments matter?
The most obvious and overlooked credit card tip. Did you know that 35 percent of your total FICO credit score is based on your payment history? So if you’ve had trouble repaying your debt, your credit score may have taken a big hit regardless of the amount of money you make now. Making late mortgage payments or missing them all together has the worst effect on your credit score. [source]

Tackle like a pro football star
I’m talking about debt here. Before applying for a new credit card, tackle your initial debt. If your credit score is decent (660 or higher), transfer a high-interest credit card balance to a card with a lower rate that is standard and not variable. LWU Credit Union currently offers a Visa Platinum Credit Card with a 9.95% standard rate.

Also, never close out a card after you finish paying it. Wait  3 to 4 months so that the paid balance is recorded by the three credit bureaus and reflected on your credit report.

Extra tip: Don’t close your oldest accounts – these are proof of your established credit and 15 percent of your FICO credit score is based on credit history. Close your most recent accounts, but again, not all at once. 

Do you have your own credit card tips to share?

Update: The percentages gathered above are components of a FICO credit score, as listed on the sited websites. Keep in mind that many credit report scores are based various mathematic formulas. Talk to your lender to see what report/formula they use. Your lender is the best source for this type of information.

[Image credit: Shawn Rossi]

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About the Author

Alejandra Gutierrez Alex is the new Social Media Specialist for the ILWU Credit Union. She's a 'nerd' at heart who enjoys community building. Her obsessions: baked goods and old mariachi ballads.