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Credit Cards Can Improve Credit Score
Everyone knows the importance of having a good credit score. A person's credit score is used pretty much in anything where you need a loan. Credit scores are also used in determining your insurance costs and some employers even check an employee's credit history prior to hiring. The credit score tells people how you manage credit and finances. There are a lot of factors that determine your credit score.The 5 main components that make up your credit score are:
- payment history - Paying your credit card bill on time is the most important component. Try to only spend as much as you can pay off. You never want to leave a balance on the credit card if possible. At the very least, make the minimum monthly payments on time.
- amounts owed - Don't max out your credit card. If your limit is $10,000, try to keep under $5,000. The reason is the higher percentage relative to your credit card limit that you spend, the higher risk of not being able to pay is.
- length of credit history - Try to use your credit card at least once every 6 months to keep a card active. Your score is helped by the length of time you have used the card.
- new credit - Don't open up new credit cards or credit accounts right before you plan on applying for a home loan or auto loan. Opening new accounts means more financial debt that you will need to be able to pay off.
- types of credit - Having a mortgage and paying it off on time every month will help your credit score. Loans such as a home loan show potential creditors that you are responsible enough to make the required payment.
Credit Cards Can Be Your Friend
A lot of people who are not responsible can end up in a lifetime's worth of debt by opening up credit card accounts. However, for those informed and responsible consumers, if you pay on time every month, keep no credit card balance or a low balance and don't open up too many new accounts, using a credit card responsibly will actually help improve your credit score.
Top Banking Rates
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Bank Name Rate
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Wachovia Bank - Greater NC Savings 5.00%
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Wachovia Bank - Greater SC Savings 5.00%
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Wells Fargo Bank Savings 3.00%
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Huntington National Bank Savings 3.00%
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Dollar Bank, FSB Savings 2.50%
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