ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Pay your bills on time
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Only check your credit score once a year
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Max out your credit cards
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Pay off your full debt at one time
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Detailed explanation-1: -Maxing out your credit card means you’ve reached your credit limit-and if you don’t pay that balance off in full immediately, this can hurt your credit score and cost you significantly in interest.
Detailed explanation-2: -The main reason carrying a balance may actually lower your score: your credit utilization ratio. Lenders view credit cards with high balances that near the limit as risky. That’s why it’s recommended that borrowers maintain a credit utilization under 30%.
Detailed explanation-3: -If you have a maxed-out credit card, you’re using 100% of your available credit for that account. Depending on the rest of your credit report, this can be devastating. It’s not uncommon for a maxed-out credit card to drop a credit score by up to 45 points.
Detailed explanation-4: -Making a late payment. Having a high debt to credit utilization ratio. Applying for a lot of credit at once. Closing a credit card account. Stopping your credit-related activities for an extended period.
Detailed explanation-5: -Follow a budget. Many people max out credit cards because they have no idea what they can afford to spend in the first place. Check your credit card balances every week. Have an emergency fund. 21-Apr-2021